KuCoin has agreed to block New Yorkers and pay $22 million
Crypto exchange KuCoin has agreed to pay $22 million to the state of New York in a settlement and consent order filed by the New York Supreme Court on December 12 and to prevent residents of the state from using its platform.
According to the order, KuCoin “acknowledges that it operates a cryptocurrency trading platform through which users, including users located in the State of New York, may buy or sell securities or commodities as defined under New York State law and that KuCoin is not registered as a securities or commodities broker-dealer. KuCoin also “represents itself as an ‘exchange ‘ represents and acknowledges that it is not registered as an exchange under the laws of the State of New York.”
KuCoin has agreed to close the accounts of all New York resident users within 120 days and to prevent any New York residents from obtaining an account in the future. Additionally, it limits withdrawal access to only 30 days, leaving the remaining 90 days for users to withdraw funds.
The exchange was once known for its privacy policy that does not require users to comply with Know Your Customer (KYC) or Anti-Money Laundering (AML) regulations. The exchange only accepts deposits and withdrawals and, therefore, does not require bank partners that require such compliance. It limits withdrawals from unverified accounts to less than 5 Bitcoin (BTC) (about $206,000 at current prices).
For users with less than this amount, the exchange offers the ability to buy or sell crypto without having to disclose personal information. This theoretically allowed KuCoin users from unlicensed countries to have accounts on the exchange because the exchange had no way of knowing who these users were.
On June 28, KuCoin ended this longstanding policy by announcing mandatory KYC for all users. Although it suspended all unverified depositors accounts after July 15th and stopped all services after July 15th. The Dec. 12 settlement confirmed that some of these beneficiaries are New York residents.
Related: Privacy is not the main feature of Bitcoin – KuCoin CEO
KuCoin does more than $1 billion in volume per day and has more than 2 million weekly visits to its website, according to data from CoinMarketCap.
