KuCoin settles with New York for $22 million and agrees to block users from state: Reuters
Quick Take
- New York Attorney General Letitia James had sued the digital asset exchange in March for violating the state’s laws.
Crypto exchange KuCoin will exit the New York market and pay $22 million to settle a lawsuit brought by the state earlier this year, according to a report from Reuters.
New York Attorney General Letitia James had sued the digital asset exchange in March for violating the state's laws. The suit had named ether, along with other tokens, as unregistered securities that KuCoin had listed in the state.
The settlement will see KuCoin pay $5.3 million to the state and refund $16.7 million worth of cryptocurrency to 177,800 New York investors, according to Reuters.
"Crypto companies should understand that they must play by the same rules as other financial institutions," James said in a statement on Tuesday, according to Reuters.
New York guidance
New York has one of the most active U.S. states in terms of writing new crypto rules. Last month, the New York Department of Financial Services released guidance to strengthen how firms list or delist coins.
Other crypto firms have been probed in New York as well. In 2021, crypto exchange Bitfinex and Tether settled with the New York attorney general's office for $18.5 million after a two-year dispute.
The attorney's office alleged in part that Tether's stablecoin was not backed "not backed '1-to-1' by USD held in a bank account." Attorney General James in October sued crypto companies Gemini, Genesis and Digital Currency Group for allegedly defrauding investors in a sweeping lawsuit.
KuCoin CEO Johnny Lyu announced the settlement as well on X, formerly known as Twitter, and said users that need to "retire from KuCoin" will get a message in the coming days.
"Rest assured - your asset security is always guaranteed and remains our top priority during this process," Lyu said.
"I also want to give you a heads-up about potential rumors surfacing in the next few weeks," Lyu added. "Please stick to the official website of KuCoin for accurate information."
Updated at 10 a.m. ET to include comments from the KuCoin CEO
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