KuCoin has announced that it will block New York-based users from its platform and has agreed to pay a USD 22 million fine to settle a lawsuit. The lawsuit in question was brought by the state as part of its ongoing efforts to keep digital asset companies in check.

Specifically, Seychelles-based KuCoin was sued in March 2023, when it was accused of failing to register with the state before letting investors buy and sell cryptocurrencies on its platform. As part of the settlement, KuCoin agreed to pay the aforementioned sum and also to stop trading securities and commodities in New York. The news comes in the context of US regulators and law enforcement agencies cracking down on fraud, money laundering and inadequate investor protections in the cryptocurrency space.

Other cryptocurrency companies that faced similar lawsuits include Genesis Global, its parent company Digitial Currency Group (DCG) and Gemini for allegedly defrauding investors of more than USD 1 billion according to Reuters. The same source revealed that DCG referred to the lawsuit as baseless. Hong Kong-based cryptocurrency exchange CoinEx also agreed to a settlement of USD 1.8 million for operating illegally because it failed to register with the state.

Back to KuCoin, its USD 22 million payment includes a USD 5.3 million payment to the state. The cryptocurrency exchange will also refund USD 16.7 million worth of cryptocurrency to 177,800 New York investors. KuCoin's troubles in the UK Apart from becoming engaged in legal battles in the US, KuCoin is also being targeted in the UK.

Specifically, in October 2023, KuCoin has been added to the UK Financial Conduct Authority’s (FCA) warning list for marketing its services without proper approvals. The UK’s rules on financial promotions were updated starting on 8 October 2023 to include cryptoasset service providers regardless of their location. In essence, all crypto platforms are required by the regulator to display clear risk warnings to UK-based consumers and meet higher technical standards, including a 24-hour cooling-off period for new customers.

The FCA stated that certain companies (including KuCoin) may be promoting financial services or products without their permission and that people should avoid dealing with them. It’s worth noting that penalties for non-compliance can include takedown requests for websites and apps, unlimited fines, and even prison time. .