KuCoin was the latest crypto exchange to agree on fines with New York regulators as the state cracked down on non-compliant service providers.
The Seychelles-based digital asset trading venue will pay $22 million as part of a settlement with the state of New York over a lawsuit alleging commodities and securities violations.
The settlement included $5.3 million in penalties paid directly to New York and $16.7 million worth of crypto reimbursements to some 177,800 resident investors. Additionally, KuCoin has agreed to shutter all its state operations completely.
New York’s crackdown on KuCoin and crypto
In March, New York Attorney General Letitia James sued KuCoin for running an unregistered commodities and securities exchange as it allowed New York investors to buy and sell cryptocurrencies on its platform without obtaining a regulatory license.
James also said that Ethereum (ETH), crypto’s second-largest market cap token, counted as a security in the lawsuit.
The suit was one of several litigation actions targeted at crypto companies suspected of operating illegally within the state of New York, in line with the Crypto Regulation, Protection, Transparency, and Oversight Act.
James had previously sued ex-Celsius CEO Alex Mashinsky and his fallen crypto titan for fraud. CoinEx was banned from doing business in New York and paid $1.7 million in penalties to settle a lawsuit.
The Attorney General’s office also accused Gemini, Genesis, and Digital Currency Group (DCG) of harming investors in a massive $1 billion crypto fraud lawsuit in October 2023. DCG and CEO Barry Silbert said the suit was “baseless”.
James and her office have often stressed the need to standardize crypto in the U.S. by implementing policies that guarantee safe conduct by operators while protecting digital asset users.