KuCoin, an international cryptocurrency exchange based in the Seychelles, has ended its operations in New York and agreed to pay more than $22 million as a result of a settlement over the Attorney General’s charges of illegally selling securities and commodities.
KuCoin loses important case but defends Ethereum at the same time
According to legal documents, KuCoin has agreed to reimburse New York users more than $16.7 million in connection with crypto transactions and pay an additional $5.3 million to the Attorney General’s Office.
It was determined that KuCoin operated a cryptocurrency exchange where assets were traded that “fall under the definition of securities or commodities under New York State law.”
While the settlement is a step forward, it falls short of the original intent of the New York Attorney General, who raised the case in March in an attempt to confirm that Ethereum is a security under local laws.
“This action represents one of the first times a regulator has argued in court that ETH, one of the largest cryptocurrencies, is a security.” – stated the Office of the Attorney General in March.
Nonetheless, KuCoin did not confirm that the specific cryptocurrency it offered was a security, but only that some of the tokens that were traded had that status.
New York State residents without access to KuCoin
Although the company did not designate any specific cryptocurrency as a security, its concessions to end the dispute are significant. Currently, users with New York IP addresses can no longer access the KuCoin platform, which had more than 177,000 users in New York State, according to the Attorney General’s Office.
“Cryptocurrency-related businesses must follow the same rules as other financial institutions, and my office will enforce those rules against those who do not follow them,” – Attorney General Letitia James noted. “I will continue to take action against companies that brazenly break the law and threaten the savings and investments of New Yorkers.”
New York not for cryptocurrencies
New York State has long stood out for having some of the strictest cryptocurrency regulations in the United States. Back in 2015, the Kraken exchange left the region in protest of BitLicense’s new registration requirements, which it described as “disgusting, unforgiving and awful.”
Similar regulations for cryptocurrencies were passed in California in October and are set to take effect in July 2025.
