KuCoin will repay a total of $16.7 million to approximately 177,800 New York investors under the terms of the agreement.
In a significant development, KuCoin, a leading cryptocurrency exchange, reached a $22 million settlement and agreed to cease trading activities in New York to resolve a lawsuit filed against it by the state.
The platform committed to restricting access to its services to residents of that state and closing relevant accounts for New York users no later than 120 days after the effective date of the order, CoinDesk said, citing the document.
KuCoin CEO Johnny Lyu confirmed the agreement with authorities in a tweet thread, while providing confidence to customers about the safety of their funds.
“According to our agreement, users who are required to withdraw from KuCoin will receive an email or SMS in approximately 10 days onwards. If you don’t receive any of these, that’s okay. Rest assured: the security of your assets is always guaranteed and remains our top priority during this process.”
New York Investors to Receive $16.7 Million in KuCoin Deal
According to a Bloomberg report, the exchange will pay a fine of $5.3 million to the state, as announced by New York Attorney General (NYAG), Letitia James. The deal is the result of allegations that KuCoin failed to register as a securities and commodities broker while “falsely” presenting itself as a cryptocurrency exchange.
New York Attorney General Letitia James emphasized the alleged risks posed by “unregistered offshore crypto platforms” to investors, consumers, and the broader economy.
New York prosecutor Letitia James stated the following:
“I will continue to take action against any company that blamelessly ignores the law and put New Yorkers’ savings and investments at jeopardy.”
KuCoin, based in Seychelles, Africa, operates a website and app that allows investors to trade digital assets. However, the exchange cannot legitimately claim to be registered with the SEC or properly designated by the Commodity Futures Trading Commission (CFTC), as required by state law.
Is NYAG Going After Crypto Companies?
According to Bloomberg, the lawsuit against KuCoin closely follows a similar legal action brought by Attorney General Letitia James against CoinEx, another crypto platform. In a previous case, the state reached a settlement of up to $24 million with Nexo Inc. and Nexo Capital Inc., two crypto companies accused of similar violations.
These legal actions have raised questions about what cryptoasset regulators consider “securities,” subject to existing rules, laws, and SEC jurisdiction, which has fueled ongoing political debate and litigation.
New York Attorney General Letitia James has also made headlines by filing a lawsuit against Alex Mashinsky, former CEO of Celsius Network, for allegedly defrauding investors of billions of dollars by misrepresenting the security of his once-prominent trading platform. crypto loans. Mashinsky later faced fraud charges from federal prosecutors.
Additionally, New York secured a $1 million settlement with BlockFi Lending LLC for offering unregistered securities as part of a broader settlement totaling $100 million with the SEC and state regulators.
Ultimately, as part of the agreement, KuCoin must take steps to prevent New Yorkers from accessing its platform. The exchange must also cooperate with US authorities by responding promptly to requests for information and freezing assets, when necessary, as stipulated by Attorney General Letitia James.
KuCoin’s native token KCS saw a staggering 22% uptrend in the last 24 hours on the daily chart.
By Leonardo Perez
