Company KuCoin has reached a settlement with the State of New York, agreeing to pay $22 million and prevent its New York customers from using its platform. The settlement follows accusations of violating securities laws, marking increasingly strict regulation of cryptocurrencies in the U.S.
KuCoin reaches settlement with New York State
Today, December 12, 2023, KuCoin has agreed to block access to its platform for its New York customers and will pay $5.3 million to the State of New York and refund the equivalent of $16.7 million in cryptocurrencies to the 177,800 New Yorkers using the platform affected.
As a reminder, in March 2023, the Attorney General of the State of New York in the United States, Letitia James, had sued KuCoin for violating state laws. The charge focused on KuCoin’s listing of Ether (ETH) and other tokens as unregistered securities.
In a thread on X, Johnny Lyu, KuCoin’s CEO, assured that the security of user assets remained a top priority.
1/ I want to update all of you about our latest compliance action. @kucoincom has reached a settlement with the New York Attorney General (NYAG), solidifying our commitment to compliant operations.
– Johnny_KuCoin (@lyu_johnny) December 12, 2023
Lyu also warned against malicious rumors and encouraged users to trust the official information provided by KuCoin:
“I would also like to alert you to possible rumors that may emerge in the coming weeks. Please refer to the official KuCoin website for reliable information. “
New York set to regulate cryptocurrencies
The agreement between KuCoin and the State of New York symbolizes the firm commitment of US regulators to impose rigorous standards on cryptocurrency exchange platforms, bringing their operations in line with those of traditional financial institutions.
KuCoin is just one of many players in the cryptocurrency ecosystem to have come under scrutiny in New York. By 2021, Bitfinex and Tether had had to pay $18.5 million to settle a 2019 legal dispute with the New York Attorney General’s office.
Then, in January 2023, the same office placed Digital Currency Group (DCG) under surveillance for suspicious internal transactions and financial difficulties. Finally, in June 2023, the SEC also filed a complaint in New York against Coinbase, accusing the platform of non-compliance with securities regulations.
Faced with a cryptocurrency market operating in a legal gray area for too long, regulators are now stepping up their oversight and vigilance, marking a significant turning point in the approach to and regulation of the cryptocurrency sector.
As cryptocurrency exchanges gain in popularity and influence, this agreement between KuCoin and the New York State Attorney General highlights the crucial importance of strict regulatory compliance.
Cryptocurrency exchange platforms must adapt and comply with current legislation to ensure their viability and protect investors’ interests, while preparing to evolve in this increasingly complex and demanding regulatory framework.
