- KuCoin has settled a lawsuit with the New York Attorney General, agreeing to cease operations in New York and pay $22 million
- The NYAG accused KuCoin of false representation as a crypto exchange and failure to register as a securities and commodities broker-dealer
- KuCoin will refund over $16.7 million to more than 150,000 affected New York investors and block New York residents from using its services.
Crypto exchange KuCoin has agreed to quit New York and hand over $22 million to the Office of the New York Attorney following a settlement agreement. New York Attorney General (NYAG) Letitia James sued the Seychelles-based exchange in March, alleging that it falsely presented itself as a crypto exchange, failing to register as a securities and commodities broker-dealer, and offering the “KuCoin Earn” investment product without proper authorization. KuCoin has agreed to refund more than $16.7 million to over 150,000 New York investors and prevent New Yorkers from being able to use its service.
KuCoin Issued With Fines and New York Ban
James’ recent crusade against crypto outfits extended to KuCoin this year, with her office finding through an investigation that the company failed to register as required by New York law, violating regulations pertaining to securities and commodities brokers operating in the state.
As is common in such circumstances the pair thrashed out a settlement which will see the exchange issue full refunds to affected investors, totaling $16,766,642, and take measures to prevent New York residents from accessing its platform.
KuCoin is also required to cooperate with US law enforcement by promptly responding to requests for asset freezes and information, while existing New York customers will only be allowed to withdraw their assets from this point onwards. KuCoin will also pay an additional $5.3 million to the state.
Offshore Exchanges “Pose a Risk to Investors”
In a press release announcing the settlement, James criticized the actions of those who are operating in the state unlawfully:
Unregistered offshore crypto platforms pose a risk to investors, consumers, and the broader economy. 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…I will continue to take action against any company that brazenly disregards the law and jeopardizes New Yorkers’ savings and investments.
KuCoin is yet to comment on the settlement.
