KuCoin exits New York with $22 million fine

KuCoin – the fourth-largest crypto exchange in the world by trading volume – has agreed to a settlement with the New York Attorney General’s Office, resolving a lawsuit that challenged its operations in the Empire State.

As part of the settlement, KuCoin will pay $22 million in fines and refunds and cease its trading activities in New York.

New York Attorney General Letitia James announced on Tuesday that KuCoin would refund $16.7 million to 177,800 New York investors and pay a fine of $5.3 million to the state.

Reuters first reported the settlement, which stemmed from a lawsuit filed against the Seychelles-based exchange in March. The New York Attorney General accused KuCoin of operating without proper registration, thereby violating state laws. The lawsuit particularly pointed out that KuCoin should have registered before offering trading services for cryptocurrencies like Ethereum (ETH), Luna, and TerraUSD.

“Crypto companies should understand that they must play by the same rules as other financial institutions, and my office will hold them accountable when they don’t. This settlement will ensure every New Yorker who put their money into KuCoin can get it back and that KuCoin won’t be able to put other New York investors at risk. I will continue to take action against any company that brazenly disregards the law and jeopardizes New Yorkers’ savings and investments,” said Attorney General James.

KuCoin CEO Johnny Lyu confirmed the settlement in a post on X, informing that affected New York-based users would be contacted via email or text within the next 10 days. Lyu also cautioned users to rely only on official KuCoin communications for accurate information, hinting at scams that might arise in the wake of this settlement.

This settlement with KuCoin follows a series of legal actions by the New York Attorney General’s office against cryptocurrency companies. This includes the recent multi-billion dollar settlement with Binance and its former CEO, Changpeng Zhao, and a lawsuit against Digital Currency Group, Gemini, and Genesis over the Gemini Earn program.

Additionally, the New York AG’s office has taken action against other crypto platforms like Hong Kong-based CoinEx, which settled with the state for $1.7 million and also exited the New York market.