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New York Attorney General Letitia James on Tuesday announced a settlement with KuCoin, with the Seychelles-based exchange agreeing to pay over $22 million for failing to register as a securities and commodities broker-dealer and for misrepresenting itself as a crypto exchange and is now prohibited from making its platform available to New Yorkers.
The consent order resolves the lawsuit against KuCoin, requiring the company to refund more than $16.7 million to over 150,000 New York investors and pay an additional $5.3 million to the state.
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KuCoin is now banned from trading securities and commodities in New York and is prohibited from making its platform available to New Yorkers.
Benzinga has reached out to KuCoin for a comment.
"Crypto companies should understand that they must play by the same rules as other financial institutions, and my office will hold them accountable when they don’t," James stated.
KuCoin, known for allowing investors to buy and sell cryptocurrencies like Ether (CRYPTO: ETH), LUNA (CRYPTO: LUNA), and TerraClassicUSD (CRYPTO: USTC), violated New York law by trading cryptocurrencies that are commodities and securities without proper registration.
This included its “KuCoin Earn” investment product, which pooled investors’ cryptocurrencies to generate income, according to the AG.
The settlement requires KuCoin to provide full refunds totaling $16,766,642 to 177,800 New York investors.
Investors can withdraw their assets directly from KuCoin over the next 90 days, after which they can file claims to receive their cryptocurrency.
Additionally, KuCoin must prevent New Yorkers from accessing their platform and is barred from creating new accounts for New York customers.
Existing New York customers will only be able to withdraw their crypto from the platform.
KuCoin is also required to cooperate with U.S. law enforcement, including responding to requests to freeze assets and information requests.
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Image: Pixabay
