Kucoin

Last updated
Kucoin
KUCOIN.svg
Type of business Private
Available in English, Russian, Chinese, Spanish, Turkish, Portuguese, Polish
Founded2017;8 years ago (2017)
Headquarters Seychelles
Area servedWorldwide
Products Cryptocurrencies
Services Cryptocurrency exchange, P2P Margin trading, P2P Margin lending, OTC
URL kucoin.com

Kucoin is a Seychelles-based cryptocurrency exchange. It was founded in China in 2017, but was later moved to Singapore following the Chinese government's restrictions on cryptocurrency companies, and subsequently to the Seychelles. [1]

Contents

Kucoin also operates its own crypto token known as Kucoin Shares (KCS). [2] [3]

History

Kucoin was founded in 2017 by Chun Gan, Ke Tang, Michael Gan and Johnny Lyu. [1] In November 2018, Kucoin raised $20 million in a series A funding round led by IDG Capital, Matrix Partners and Neo Global Capital. [4]

KuGroup was formed in 2020 to manage the three business divisions in the company, including KuCoin Global, KuCloud and KuChain, and KCS Business Group. Michael Gan was appointed chairman of KuGroup, while Johnny Lyu was appointed CEO of KuCoin Global.[ citation needed ]

Kucoin raised $150 million in a series B funding round led by Jump Crypto in May 2022, giving it a valuation of $10 billion. [5] [6] In July 2022, Kucoin announced a $10 million investment from trading firm Susquehanna International Group (SIG). [2] In September 2020, Kucoin announced it had suffered a major security breach that saw $281 million of crypto assets stolen. [7] [8] Kucoin CEO, Johnny Lyu disclosed in a statement that the hack occurred after private keys linked to crypto wallets got exposed. He added that the findings of the internal security audit report, revealed that part of Bitcoin, ERC-20, and other tokens in Kucoin's hot wallets were transferred out of the crypto exchange. [9] Kucoin offered rewards of up to $100,000 to anyone who could provide valid information regarding the hack. [10] North Korean hacker crew Lazarus Group was accused of carrying out the hack, which was dubbed the biggest cryptocurrency hack of 2020. [11] In February 2021, Johnny Lyu wrote in a blog post that it had "cooperated with exchange and project partners to recover $222 million (78%), cooperated with law enforcement and security institutions to recover $17.45 million (6%) and insurance fund covered the remaining part, about $45.55 million (16%). [8] [10] [12]

In December 2023, KuCoin reached a settlement with the New York State Attorney General. [13] Under the settlement, the company agreed to pay $22 million in fines and refunds and to discontinue its trading operations in New York. [13] The settlement addressed allegations that KuCoin operated without proper registration as a securities and commodities broker-dealer and misrepresented its status as a cryptocurrency exchange. [13]

In March 2024, KuCoin and its co-founders, Chun Gan and Ke Tang, were indicted on charges of operating an unlicensed money transmitting business and failing to implement required anti-money laundering protocols. [13]

In January 2025, KuCoin admitted to charges of operating an unlicensed money transmitting business and agreed to pay nearly $300 million in fines and forfeitures, resolving the criminal proceedings. [13]

United States

In March 2023, New York's attorney general Letitia James sued Kucoin for failing to register with the state before letting investors buy and sell cryptocurrencies on its platform. [14] The attorney general stated that Kucoin violated the Martin Act, by transacting in cryptocurrencies, selling the product "KuCoin Earn" to generate income for itself and investors, and wrongfully calling itself an "exchange." [15] [16] In December 2023, after a long legal battle, Kucoin agreed to block New York users from its platform and pay $22 million to settle the lawsuit. [17] [18]

In March 2024, the United States Commodity Futures Trading Commission (CFTC) filed criminal charges against Kucoin and two of its founders, accusing the cryptocurrency exchange of violating U.S. anti-money laundering laws by failing to vet customers, allowing billions of dollars in illicit funds to be transferred since its founding in 2017 [19] [20] Prosecutors said Kucoin sought business from U.S. customers without registering with the Treasury Department and putting in place procedures to verify clients' identities as required by U.S. law. [20] [21] Kucoin co-founders, Chun Gan and Ke Tang, were also charged with related conspiracy charges. [1]

In January 2025, Kucoin plead guilty to unlicensed money transmissions and agreed to pay penalties totalling $300 million. Co-founders Gan and Tang will no longer have a role in Kucoin operations. Peken Global Limited (“PEKEN”), the company that operated Kucoin in the US also agreed that Kucoin will exit the US market at least for the next two years. [22]

Canada

In June 2021, The Ontario Securities Commission (OSC) issued a statement alleging that Kucoin trading platforms failed to comply with the province's securities law. OSC stated that Kucoin was operating an unregistered crypto asset trading platform and encouraging Canadian customers to trade crypto asset products that are securities and derivatives on the platform. [23] on July 22, 2022, OSC obtained orders permanently banning Kucoin from participating in Ontario's capital markets and requiring it to pay a $2-million administrative penalty, plus $96,550.35 towards the costs of the OSC's investigation. [24]

Netherlands

The Dutch central bank in December 2022 issued a statement saying cryptocurrency exchange Kucoin was operating in the Netherlands without registration. [25] The central bank underlined that the exchange is "not in compliance with the Anti-Money Laundering and Anti-Terrorist Financing Act and is illegally offering services for the exchange between virtual and fiduciary currencies." [25] [26] Kucoin responded through its spokesperson in an email, stating that "KuCoin is not a Dutch entity and does not have an office in the Netherlands." [26]

United Kingdom

In October 2023, The United Kingdom's Financial Conduct Authority (FCA) added to its warning list over 140 digital asset companies. The statement stated that Kucoin and the other digital asset companies lacked the regulatory approval to provide services in the UK market. [27]

India

In May 2024, Indian government's Financial Control Unit (FIU) approved KuCoin's application to register as a Virtual Asset Service Provider (VASP) after it paid a penalty of 3.5 million INR for regulatory non-compliance. [28]

Related Research Articles

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References

  1. 1 2 3 Sun, Mengqi (2024-04-10). "KuCoin and Its Founders Face Criminal Charges Over Money-Laundering Violations - WSJ". WSJ. Archived from the original on 2024-04-10. Retrieved 2024-04-11.
  2. 1 2 "Cryptocurrency based KuCoin secures $10 million investment from trading firm SIG". Financialexpress. 2022-07-21. Retrieved 2024-04-10.
  3. ↑ "Kucoin raises $150 million in a pre-series B funding round". Financialexpress. 2022-05-10. Retrieved 2024-04-10.
  4. ↑ "Crypto platform KuCoin raises US$20m in Series A funding". The Business Times . November 15, 2018.
  5. ↑ "Crypto Exchange KuCoin Scores Funding at $10 Billion Valuation". Bloomberg.com. 2022-05-10. Retrieved 2024-04-10.
  6. ↑ "Crypto exchange KuCoin valued at $10 billion in latest funding round". Reuters . 2022-05-10. Archived from the original on 2022-05-10. Retrieved 2024-04-10.
  7. ↑ "These are the largest cyber thefts of the past decade—and 80% of them involve Bitcoin". Fortune. Retrieved 2024-04-11.
  8. 1 2 "The real victims of mass crypto-hacks that keep happening". 2021-08-25. Retrieved 2024-04-11.
  9. ↑ Adesina, Olumide (2020-09-27). "Hackers, expose crypto wallets worth $150 million at Kucoin". Nairametrics. Retrieved 2024-04-11.
  10. 1 2 Brewster, Thomas. "North Korean Hackers Accused Of 'Biggest Cryptocurrency Theft Of 2020'—Their Heists Are Now Worth $1.75 Billion". Forbes. Retrieved 2024-04-11.
  11. ↑ Nichols, Michelle; Satter, Raphael (February 10, 2021). "U.N. experts point finger at North Korea for $281 million cyber theft, KuCoin likely victim". Reuters. Retrieved April 11, 2024.
  12. ↑ "Hackers steal $320 mn in crypto: Here are the 10 biggest digital currency thefts of all time". CNBCTV18. 2022-02-03. Retrieved 2024-04-11.
  13. 1 2 3 4 5 Voris, Bob Van; Dolmetsch, Chris (January 28, 2025). "KuCoin Pleads Guilty in Crypto Case, Agrees to Pay $300 Million". Bloomberg.
  14. ↑ "Crypto Exchange KuCoin Sued in New York's Industry Crackdown". Bloomberg. 9 March 2023. Retrieved 2024-04-11.
  15. ↑ Jonathan, Stempel (March 10, 2023). "New York sues KuCoin, expands cryptocurrency crackdown". Reuters. Retrieved April 11, 2024.
  16. ↑ "N.Y. Attorney General Labels Ether a Security, Injecting Fresh Confusion Into Crypto Legal Debate". WSJ. Retrieved 2024-04-11.
  17. ↑ "KuCoin to Pay $22 Million, Exit NY Market to Resolve Lawsuit". Bloomberg. 12 December 2023. Retrieved 2024-04-11.
  18. ↑ "Crypto Exchange KuCoin Pays $22 Million to Settle Lawsuit, Will Exit New York". WSJ. Retrieved 2024-04-11.
  19. ↑ "DOJ accuses crypto exchange KuCoin of money laundering violations and receiving billions in suspicious funds". Fortune Crypto. Retrieved 2024-04-11.
  20. 1 2 "DOJ accuses crypto exchange KuCoin of money laundering violations and receiving billions in suspicious funds". Fortune. 2024-03-26. Retrieved 2024-04-11– via Yahoo Finance.
  21. ↑ "US charges KuCoin crypto exchange with anti-money laundering failures". Reuters. March 27, 2024. Retrieved April 11, 2024.
  22. ↑ Biase, Nicholas (January 27, 2025). "Kucoin Pleads Guilty To Unlicensed Money Transmission Charge And Agrees To Pay Penalties Totaling Nearly $300 Million". United States Attorney Office Southern District of New York. Retrieved January 27, 2025.
  23. ↑ "KuCoin, Affiliates Not Registered In Ontario, Regulator Warns In Latest Advisory". International Business Times. 2022-08-24. Retrieved 2024-04-11.
  24. ↑ Shecter, Barbara (June 22, 2022). "OSC metes out penalties, market ban in pair of crypto trading cases". Financial Post. Retrieved April 11, 2024.
  25. 1 2 "Dutch central bank warns that KuCoin operating without registration". Reuters. December 15, 2022. Retrieved April 11, 2024.
  26. 1 2 "KuCoin Responds To DNB's Warning About 'Illegally Offering Services' In The Netherlands". International Business Times. 2022-12-18. Retrieved 2024-04-11.
  27. ↑ "Huobi, KuCoin Among Crypto Firms Added to UK Watchdog's Warning List". Bloomberg. 9 October 2023. Retrieved 2024-04-11.
  28. ↑ https://economictimes.indiatimes.com/markets/cryptocurrency/financial-intelligence-unit-clears-binance-and-kucoin-to-be-virtual-asset-service-providers/articleshow/110016938.cms?from=mdr EconomicTimes. 16 May 2024. Retrieved 28-01-2025.
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