Crypto Compliance Chronicles: KuCoin's $22M Settlement Saga

In a significant turn of events, the major cryptocurrency exchange KuCoin has reportedly come to terms with New York authorities, leading to the cessation of its services in the local market, accompanied by a noteworthy payment of $22 million.

This resolution comes on the heels of an extended legal battle initiated by the New York Attorney General (NYAG), who had taken KuCoin to court, alleging the sale of unregistered securities to users within the state.

KuCoin exits the New York market

According to a report by Reuters, the $22 million settlement comprises a payment of $5.3 million to the state of New York, coupled with the reimbursement of approximately $16.7 million worth of cryptocurrencies to nearly 180,000 investors in the state.

NYAG Letitia James, commenting on this latest development, emphasized the imperative for cryptocurrency companies to operate under the same regulatory framework as traditional financial institutions. In her words, "Crypto companies should comprehend the necessity to abide by identical rules as other financial entities."

Adding to the narrative, KuCoin CEO Johnny Lyu announced the settlement on X, assuring affected users that they can expect to receive communication via email or SMS in the coming days.

"Per our agreement, users required to discontinue their association with KuCoin will be notified via email or SMS within approximately 10 days and beyond. If you don't receive either of these, you're in the clear. Rest assured, your asset security remains our paramount concern throughout this process."

The legal saga unfolded in March 2023 when NYAG Letitia James filed a lawsuit against KuCoin, alleging the unlawful sale of Ether (ETH), Terra (LUNA), and TerraUSD (UST) on its platform. The lawsuit categorized these tokens as both securities and commodities, asserting that KuCoin had listed and sold them without proper registration.

New York continues to uphold rigorous supervision of the cryptocurrency sector

Highlighting the persistent oversight of the crypto industry in New York, Attorney General Letitia James has been actively pursuing legal action against other exchanges. In a similar vein, CoinEx, facing allegations of illegal operations in February 2023, agreed to pay almost $2 million in refunds and penalties. Tether and Bitfinex also resolved their legal disputes with the NYAG after an extended legal battle.

In recent actions, James targeted Genesis, Gemini, and Digital Currency Group (DCG), alleging fraudulent activities that led to the defrauding of over 230,000 investors, resulting in losses exceeding $1 billion. These developments underscore the evolving landscape of cryptocurrency regulations, with authorities maintaining a vigilant stance to ensure compliance and protect investors' interests.

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