Seychelles-based KuCoin has consented to pay about $22 million to the New York state in response to halting its crypto platform usage to the users of the state.
This settlement was officially recorded in a stipulation and consent order submitted to the New York Supreme Court on December 12th.
The cryptocurrency exchange’s payment involves $5.3 million to the state and returning cryptocurrency which amounts to $16.7 million to 177,800 investors from New York.
As highlighted in the order, the crypto exchange acknowledges that it runs a cryptocurrency trading platform where crypto users, particularly in New York, can trade digital coins or commodities-based crypto under the New York state protocols.
KuCoin also admits that it represents itself as an ‘exchange’ for cryptocurrency trading without following the official registration standards of the New York State laws.
The exchange firm agreed to shut down all of the accounts held by the New York users within 120 days and bar them from typing down new accounts in the future.
Furthermore, it will minimise the withdrawal access to 30 days which allows the KuCoin customers to withdraw their capital in the 90 days.
Meanwhile, for the users with small capital in their accounts, KuCoin offered an option to trade the cryptocurrencies without the need to share their personal information.
In summary, the situation authorized the users from countries where the crypto exchange lacked license could acquire the accounts on KuCoin since the platform had no idea who these customers were.
Kucoin suspended this long-standing policy on June 28 by unveiling the mandatory KYC for its users. It stopped accepting deposits from non-verified accounts and halted the crypto services for users after July 15, however, withdrawals remain to continue.
According to CoinMarketCap’s data, the crypto exchange KuCoin's daily trading volume exceeds more than $1 billion while its website has more than 2 million visits.
