Crypto exchange KuCoin has reached a resolution in a lawsuit filed by the Attorney General of the State of New York, agreeing to pay a total of $22 million and halt access for users in New York state. Court documents filed in the Supreme Court of the State of New York County revealed the details of the settlement.
Settlement Terms and Payments
As per the court documents, KuCoin will make payments totaling $22 million, comprising a refund of $16.77 million to New York customers and a payment of $5.3 million to the Attorney General’s office.
Additionally, the settlement aims to address allegations of violating securities laws by offering tokens, including ether, that meet the criteria of a security without obtaining registration from the attorney general’s office.
Background and Legal Proceedings
Attorney General Letitia James initiated the lawsuit in March, marking the first instance of a regulatory body alleging in court that ether constituted a security. Furthermore, KuCoin’s settlement reflects its commitment to compliant operations, as expressed by CEO Johnny Lyu in a tweet,
I want to update all of you about our latest compliance action. @kucoincom has reached a settlement with the New York Attorney General (NYAG), solidifying our commitment to compliant operations.
Terms of Resolution and User Access
According to the court document, KuCoin is obligated to terminate access to its services for users in New York and close relevant accounts within 120 days from the effective date of the order. In addition, this measure is part of the settlement agreement to address the concerns raised by the Attorney General’s office.
However, the settlement reached by KuCoin with the New York Attorney General’s office involves a substantial payment, along with the cessation of services for users in the state. Moreover, by agreeing to the terms, KuCoin aims to resolve allegations related to securities law violations. It further reinforces its commitment to operating in compliance with regulatory standards.
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