Kucoin to Pay $22 Million Settlement to New York State, Bars NY Residents from Platform
Summary:
Under a mutual agreement with the State of New York, cryptocurrency exchange Kucoin is to pay a $22 million settlement and bar New York residents from its platform. The decision was documented in a consent order filed on December 12. Kucoin concurs it operated an unlicensed crypto trading platform, permitting users to buy or sell cryptocurrencies deemed as securities or commodities under New York State laws. All New York users' accounts will be closed within 120 days and residents will be prevented from future account creation. The exchange will limit withdrawal access for 30 days with an additional 90-day window for fund withdrawal.
In accordance with a mutual consent order filed in New York Supreme Court on December 12, Kucoin, a cryptocurrency exchange, will pay a $22 million settlement to New York State and prohibit the state's residents from utilizing its platform. The consent order discloses that Kucoin concedes operating a platform for crypto trading that they weren't authorized to manage under New York State laws as it permits users, including those in New York, to sell or buy cryptocurrencies that are perceived as securities or commodities. Kucoin was not legally registered as a broker-dealer dealing with commodities or securities, despite presenting itself as an 'exchange.'
The resolution involves the closure of accounts belonging to any New York residents within 120 days, coupled with restricting the ability for these residents to open future accounts with the exchange. Additionally, the exchange will limit its withdrawal access to an initial 30-day period, subsequently permitting the users a 90-day window to withdraw the funds.
Kucoin was previously recognized for its strong stance on user privacy, with no compulsion for the compliance with either Anti Money Laundering or Know Your Customer regulations (KYC/AML). With its operations only reliant on cryptocurrency for withdrawals and deposits, the exchange evaded the need for banking partners who might demand such compliance. It imposed a restriction on withdrawals from unverified accounts to under 5 BTC ($206,000 approx based on the current price). For users making withdrawals under this limit, Kucoin provided the possibility to trade crypto without the disclosure of personal information. Hypothetically, this could permit users from regions without Kucoin's licensing to establish accounts, as the exchange wouldn't know the users' identities.
However, on June 28, Kucoin put an end to this long-standing strategy by announcing a mandatory KYC for all its users. Besides putting a stop to deposits from accounts that aren't verified, it discontinued all services for these users after July 15, although they could still process withdrawals. It was concurred by the December 12 settlement that some of the users were residents of New York.
Information from Coingecko signifies that Kucoin oversees over $1 billion in transaction volume every day and gets more than 2 million weekly hits on its website.
Published At
12/12/2023 7:10:09 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.