The cryptocurrency exchange KuCoin will ban all New York-based users from its platform and pay $22 million to settle a lawsuit filed by the state’s attorney general.
The settlement, announced Tuesday, ends a legal battle that began in March when Attorney General Letitia James accused the Seychelles-based company of allowing New York investors to trade cryptocurrencies without proper registration.
“Crypto companies must play by the same rules as other financial institutions,” James said.
As part of the deal, KuCoin agreed to halt all trading of securities and commodities in New York state. This comes amid a broader crackdown on fraud and misconduct in the cryptocurrency industry by U.S. regulators.
In October, James sued the crypto firms Genesis Global and Gemini for allegedly defrauding investors out of $1 billion. Other cases have targeted illegal operations, money laundering and theft.
KuCoin’s $22 million settlement includes $5.3 million in fines and $16.7 million to reimburse some 177,800 New York-based investors.
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While not as large as rivals like Binance and Coinbase, KuCoin is still one of the world’s major cryptocurrency exchanges. Tuesday’s settlement signals that companies in the space can expect greater scrutiny from states like New York despite their overseas locations.
Regulators want to rein in illegal behaviour and boost protections for crypto investors. As Attorney General James said, “Crypto companies should understand that they must play by the same rules as other financial institutions.”
