Cryptocurrency exchange KuCoin’s parent company has agreed to pay a $500,000 civil penalty in a settlement that claimed it operated an unregistered offshore commodities exchange.
Summary
- KuCoin’s parent company agreed to pay a $500,000 civil penalty to settle CFTC charges tied to operating an unregistered offshore commodities exchange.
- The firm resolved the case without admitting or denying the allegations, while avoiding profit disgorgement after cooperating with investigators.
The Commodity Futures Trading Commission said in a Monday announcement that KuCoin’s parent company, Peken Global Limited, has entered into a consent order, bringing all of the agency’s claims to a close. As part of the settlement, the company has agreed to resolve the matter without admitting or denying the CFTC’s claims.
For its willingness to cooperate with the investigation, the regulator has not required the company to disgorge profits gained during the period between July 2019 and around June 2023.
The $500,000 penalty imposed by the court also takes into account the earlier $300 million fine paid in a separate case brought by the Department of Justice for operating an unlicensed money transmitter business.
Kraken faces restrictions in the U.S.
Kraken was first sued by the CFTC in March 2024 for operating an unregistered platform and failing to maintain adequate regulatory oversight. Subsequently, in late March 2024, the CFTC issued a statement outlining that the agency was seeking strong punishments and permanent injunctions against companies involved with the exchange’s operations.
The commission claimed that the exchange lacked sufficient know-your-customer procedures, failing to properly verify the identity of its users, while also acting as an unregistered futures commission merchant or foreign board of trade without the necessary legal clearances to serve U.S. customers.
“The order permanently enjoins Peken Global from future violations,” the CFTC said, effectively barring the exchange from serving Americans unless it acquires the necessary approvals.
Recently, the exchange has also faced challenges in Dubai, where the Virtual Assets Regulatory Authority said KuCoin was serving locals “without the necessary regulatory approvals” while misrepresenting its licensing status.