KuCoin’s operator, PEKEN Global Limited, pleaded guilty to operating an unlicensed money-transmitting business and agreed to pay $297 million in penalties to settle charges in the U.S.

The cryptocurrency exchange was charged in March 2024 for its failure to implement the required anti-money laundering (AML) requirements, allowing cybercriminals to use the platform to launder their proceeds.

According to the U.S. Department of Justice, the platform did not abide by the applicable legal obligations to implement a “know your customer” (KYC) system and verify user identities.

To make matters worse, KuCoin allegedly also concealed the fact that this was a mandatory requirement as per U.S. laws, creating a false idea to customers that they were exempt.

This deception continued until at least July 2023, with KuCoin only adding a KYC system in August 2023, which impacted both new and existing clients.

However, existing customers with balances on the platform were allowed to withdraw their money without being required to go through the KYC process.

“For years, KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions,” stated U.S. Attorney Danielle R. Sassoon in the latest U.S. DoJ announcement.

“As a result, KuCoin was used to facilitate billions of dollars’ worth of suspicious transactions and to transmit potentially criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes.”

Earlier this week, KuCoin’s owner and operator pled guilty today to one count of operating an unlicensed money-transmitting business, agreeing to pay $297 million to settle the charges.

Additionally, KuCoin will exit the U.S. market for the next two years, and its founders, Chun Gan, a/k/a “Michael,” and Ke Tang, a/k/a “Eric,” will be removed from KuCoin’s management and core operations team.

KuCoin, one of the largest cryptocurrency exchanges in the world, has been active in the U.S. since 2017, serving approximately 1,500,000 registered users in the country.

The platform’s earnings from 2017 until 2024, the time of the indictment, in the U.S., are estimated to be $184.5 million, so the final penalty was based on this amount, plus a criminal fine of $112.9 million.

As part of the same agreement, Gan and Tang will forfeit $2,700,000, which they received from KuCoin’s operations in the U.S.