- KuCoin will pay $22 million to settle a lawsuit with New York alleging violations of state laws, including listing unregistered securities.
- As part of the settlement, KuCoin will cease operations in New York, block access to current users in the state, and refund $167 million to investors.
- The settlement highlights New York’s strict approach to crypto oversight and may encourage exchanges to avoid the state, though it underscores the need for compliance.
KuCoin, a major global cryptocurrency exchange, has agreed to settle with the state of New York for $22 million. The settlement comes after New York sued KuCoin earlier this year for allegedly violating state laws.
Background on the Lawsuit
In March 2022, New York Attorney General Letitia James filed a lawsuit against KuCoin. The lawsuit alleged that KuCoin listed unregistered securities, including ether, for trading in violation of state laws.
Details of the Settlement
According to a Reuters report, KuCoin will pay $22 million to settle the lawsuit. This includes:
- $10 million in penalties
- $2 million in costs to the state
- $10 million to New York customers in restitution
Additionally, KuCoin will cease operations in New York and block access to current New York-based users. The company will refund $167 million worth of cryptocurrency to 178,800 New York investors.
Reactions to the Settlement
New York Attorney General Letitia James said in a statement that “cryptocurrency companies should understand that they must play by the same rules as other financial institutions.”
KuCoin CEO Johnny Lyu announced the settlement on Twitter. He assured users that assets will remain secure during the blocking process.
Analysis of the Settlement
The settlement highlights New York’s aggressive approach to crypto regulation. It follows other major crypto probes in the state, including a $18.5 million settlement paid by Bitfinex and Tether last year.
Going forward, the deal may encourage other exchanges to avoid New York due to its strict oversight. However, it also underscores the need for crypto firms to comply with state laws to avoid legal jeopardy.
