KuCoin, one of the world’s largest cryptocurrency exchanges, has agreed to block New York users from its platform and pay $22 million to settle a lawsuit brought by the state as part of its push to rein in digital assets companies.
Attorney General Letitia James sued Seychelles-based KuCoin in March, accusing the platform of failing to register with the state before letting investors buy and sell cryptocurrencies on its platform.
“Crypto companies should understand that they must play by the same rules as other financial institutions,” James said in a statement on Tuesday.
The settlement, in which KuCoin also agreed to stop trading securities and commodities in New York, comes as U.S. regulators and law enforcement agencies crack down on fraud, money laundering and inadequate investor protections in the cryptocurrency space.
In October, James’ office sued cryptocurrency firms Genesis Global, its parent company Digitial Currency Group and Gemini for allegedly defrauding investors of more than $1 billion. DCG called the lawsuit baseless.
Her office in June reached a $1.8 million settlement with Hong Kong-based cryptocurrency exchange CoinEx for operating illegally because it failed to register with the state.
Last month, FTX founder Sam Bankman-Fried was convicted on federal charges of stealing billions of dollars from that cryptocurrency exchange’s customers, while rival Binance’s founder agreed to plead guilty to breaking U.S. anti-money laundering laws.
KuCoin’s $22 million payment includes a $5.3 million payment to the state and the refunding of $16.7 million worth of cryptocurrency to 177,800 New York investors.
KuCoin trails Binance, Coinbase and Kraken among cryptocurrency spot exchanges on factors including traffic, liquidity and trading volumes according to the data company CoinMarketCap.