Breaking: KuCoin Ends New York Operations, Settles with NYAG for $22M
In a significant development in the cryptocurrency regulatory landscape, KuCoin, a prominent crypto exchange, has agreed to a $22 million settlement with the New York Attorney General’s (NYAG) office. This resolution marks a pivotal moment in the ongoing scrutiny of cryptocurrency exchanges by regulatory bodies in the United States.
NYAG Lawsuit Leads KuCoin to Leave New York
The settlement agreement, initially reported by Reuters, follows a lawsuit filed by the NYAG in March against the Seychelles-based KuCoin. The NYAG, led by Letitia James, accused the exchange of operating without proper registration, a requirement for platforms facilitating the buying and selling of cryptocurrencies like Ethereum (ETH), LUNA, and TerraUSD.
The lawsuit notably raised the issue of whether ether should be classified as a security, a point of contention in the broader regulatory discussion surrounding cryptocurrencies. The resolution of this lawsuit involves KuCoin paying $22 million and announcing its decision to cease operations in the New York market. This move highlights the growing regulatory pressures facing cryptocurrency exchanges operating in the United States.
In a recent post, KuCoin CEO Johnny Lyu confirmed the settlement and the company’s forthcoming exit from New York. Lyu assured that impacted users, specifically those based in New York, would be notified through email or text within the next ten days regarding the developments. He also cautioned users to rely solely on official communication from KuCoin, especially in the face of potential rumors, reinforcing the importance of obtaining information directly from reliable sources.
NYAG Intensifies Legal Action Against Crypto Firms
This settlement with KuCoin comes on the heels of a series of actions the NY AG’s office took against cryptocurrency companies accused of violating New York’s laws. Notably, the U.S. Department of Justice recently announced a substantial settlement with another major crypto exchange, Binance, and its former CEO, Changpeng Zhao.
In addition, the NYAG has actively pursued legal actions against various entities in the crypto space. In October, a lawsuit was filed against Digital Currency Group, Gemini, and Genesis, focusing on the Gemini Earn program and its classification as an investment contract. Hong Kong-based CoinEx also found itself under the NYAG’s scrutiny, resulting in a $1.7 million settlement and its subsequent exit from the New York market.
The KuCoin settlement represents a significant moment in the ongoing dialogue between cryptocurrency entities and regulatory bodies. It underscores the increasing attention and stringent measures regulatory agencies are applying to the operations of crypto exchanges, especially concerning their compliance with existing financial laws and regulations.
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