KuCoin Settles New York Charges for $22M, Halts Services for Residents

<p>KuCoin has reached a settlement of USD $22 million with the state of New York and committed to ceasing its services for users in the region, according to an order filed in the Supreme Court today (Tuesday). The crypto
exchange was charged for offering, selling, and purchasing cryptocurrencies as
securities and commodities, breaching New York's laws. </p><p>KuCoin has acknowledged these allegations, agreeing to
a payment of $5.3 million and specific obligations. These include terminating
access to its services for users in New York within a stipulated timeframe,
ceasing account creation, and restricting existing accounts
solely for withdrawal purposes.</p><p>Additionally, <a href="https://www.financemagnates.com/tag/kucoin/" target="_blank" rel="follow">KuCoin</a> has committed to
returning current account balances, valued at
approximately $16.7 million in fiat and cryptocurrencies, held by customers in New York. This restitution
process involves facilitating withdrawals and transferring remaining balances
to a third-party fund administrator for subsequent distribution to the affected users.</p><p>KuCoin's Agreement to Halt Services in New York</p><p>KuCoin's compliance with the agreement involves a commitment
to cease operations for users in the region, ensuring strict adherence to the terms and conditions of consent orders.</p><blockquote><p lang="en" dir="ltr">Cryptocurrency exchange KuCoin has agreed to pay $22 million to settle a lawsuit brought by the New York Attorney General’s Office. Following the settlement, KuCoin will exit the New York market. Previously in March, NYAG accused KuCoin of operating without a license and…</p>— Wu Blockchain (@WuBlockchain) <a href="https://twitter.com/WuBlockchain/status/1734581790952862096?ref_src=twsrc%5Etfw">December 12, 2023</a></blockquote><p>In March, New York State's Attorney General, Letitia James, <a href="https://www.financemagnates.com/cryptocurrency/nyag-labels-ether-as-a-security-in-kucoin-lawsuit/" target="_blank" rel="follow">filed a lawsuit against KuCoin</a>. She alleged that the exchange operated illegally within the state. The lawsuit marked a pivotal moment as it was the first time a
regulatory body labeled Ether, alongside other cryptocurrencies, as
securities under the Martin Act.</p><p>The lawsuit accused KuCoin of offering unregistered
securities through its KuCoin Earn product, a lending and staking service. The
case was substantiated by the NYAG's office, which interacted with the platform
using a New York IP address, conducting transactions and demonstrating the
platform's operational engagement.</p><p> KuCoin Faces Mounting Regulatory Challenges</p><p>Last year, South Korea's Financial Intelligence Unit (FIU)
<a href="https://www.financemagnates.com/cryptocurrency/regulation/kucoin-among-16-illegal-crypto-exchanges-operating-in-south-korea/" target="_blank" rel="follow">intensified its crackdown on unauthorized overseas crypto exchanges</a>,
scrutinizing 16 platforms, including KuCoin. These platforms allegedly
operated in the country without complying with local regulatory guidelines.</p><p>The exchange allegedly failed to adhere to the country's
Financial Information Act. Thus, the FIU urged the Korea Communications
Commission to block access to the websites and mobile applications of this
platform.</p>

This article was written by Jared Kirui at www.financemagnates.com.