In a groundbreaking development, cryptocurrency exchange giant KuCoin has agreed to pay a staggering $22 million and cease operations for New York customers to settle a lawsuit brought forth by New York Attorney General Letitia James. The legal action, initiated in March, accused KuCoin of flouting state regulations by permitting investors to trade cryptocurrencies without proper registration.
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…
— Wu Blockchain (@WuBlockchain) December 12, 2023
Attorney General James asserted that cryptocurrency companies must adhere to the same regulatory standards as traditional financial institutions, emphasizing the need to protect customers from potential fraud and abuse within the burgeoning crypto landscape, per a Reuters report. This move aligns with James’ broader initiative to clamp down on the cryptocurrency industry, citing prevalent issues such as scams, money laundering, and insufficient investor protections.
This settlement marks a significant stride in James’ ongoing legal pursuits against crypto entities. Earlier actions include lawsuits against Genesis Global, Digital Currency Group, and Gemini, alleging fraudulent activities totaling over $1 billion. Additionally, a $1.8 million settlement was reached with CoinEx for operating unlawfully in New York.
KuCoin Settlement Case Is One of Many This Year
The KuCoin resolution comes amidst a flurry of regulatory and legal actions targeting crypto companies across the United States. Notably, FTX founder Sam Bankman-Fried recently faced a conviction for embezzling billions from customers, while the founder of Binance, Changpeng Zhao, also pleaded guilty to violating anti-money laundering laws.
KuCoin’s $22 million payment encompasses a $5.3 million fine to the state and the restitution of $16.7 million in crypto to 177,800 New York investors. This landmark settlement signals a growing focus on regulatory compliance within the crypto sphere and sets a precedent for other exchanges to reassess their operations in alignment with legal standards.
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