Cryptocurrency exchange KuCoin has reached a $22 million settlement with the state of New York following allegations of illegal operation and misleading investors. The settlement includes $16.7 million in refunds for New York-based KuCoin investors, as well as a $5.3 million fine paid directly to the state. KuCoin CEO Johnny Lyu confirmed the settlement on Twitter.
As part of the settlement, KuCoin has agreed to block access to its platform for New York-based investors within the next 120 days, as ordered by the Attorney General. The company is also required to identify and close all trading accounts associated with customers residing in New York.
The lawsuit brought by New York Attorney General Letitia James accused KuCoin of falsely presenting itself as a licensed crypto exchange without proper registration as a securities or commodities broker-dealer. By failing to register with regulatory bodies such as the SEC and CFTC, KuCoin allegedly deprived New York investors of legal protections and oversight.
The lawsuit also highlighted concerns regarding the trading of unregistered securities, such as the popular cryptocurrency ether, on KuCoin’s platform. Additionally, the Attorney General’s office raised issues regarding stablecoins, specifically Tether (USDT), claiming that KuCoin failed to confirm adequate USD reserves to fully back the tokenized assets at a 1:1 ratio, putting investors at risk.
The settlement with KuCoin is part of a series of legal actions taken by New York regulators against major players in the crypto industry accused of defrauding investors or operating illegally. This includes a billion-dollar lawsuit against Gemini, Genesis Trading, and the Digital Currency Group umbrella. The settlement reflects New York regulators’ efforts to exert more control over the largely unregulated crypto industry, particularly in light of platform collapses that have resulted in significant losses for investors. Just weeks ago, New York reached a similar settlement of $1.8 million with the Hong Kong-based exchange CoinEx on similar grounds.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Letitia James, Johnny Lyu |
| Companies | Securities and Exchange Commission (SEC), KuCoin, Genesis Trading, FTX, Commodity Futures Trading Commission (CFTC), CoinEx, Gemini, New York Attorney General’s office, Digital Currency Group |
| Currencies | Lido Staked Ether |
| Securities | None |
