KuCoin, a crypto exchange, will refund $16.7M to users and will owe the Office of the Attorney General an additional $5.3M.
KuCoin, a Seychelles-founded crypto exchange, has accepted to stop all activities in New York. It will pay more than $22M to resolve a case with the New York Attorney General (NYAG) regarding the unlawfully unregistered sale of commodities and securities.
KuCoin Agrees $16.7M Refund to Users
Allegedly, the firm must pay refunds for crypto transactions worth more than $16.7M to KuCoin users. Besides, legal filings show it will owe an additional $5.3M to the Office of the Attorney General.
KuCoin has also acknowledged that based on the settlement, it runs a crypto exchange that enables people to buy or sell cryptocurrencies that ‘are commodities or securities as defined under New York State’s regulations.’
Despite being a significant admission, the language failed to meet the New York Attorney General’s original objective when it filed its case against the crypto exchange in March. At that time, the New York Attorney General sought to utilize its case against the exchange to concurrently illustrate that under New York regulations, Ethereum is a security.
In March, the NYAG claimed the action was one of the initial instances a regulator asserted in court that Ethereum, one of the biggest cryptocurrencies, was a security. According to the petition, Ethereum, similar to UST and LUNA, is a theoretical asset that depends on third-party developers’ efforts to supply profits to Ethereum holders.
Nevertheless, Tuesday’s settlement did not lead to KuCoin acknowledging that any specific cryptocurrency it offered was a security. It is just that some of the purchased and sold tokens were either commodities or securities.
KuCoin Inaccessible to New York Residents
Nonetheless, KuCoin’s exceptions to the suit are considerable. At the time of writing, persons using New York IP addresses could not access the crypto exchange’s platform. According to the New York Attorney General, the service had more than 170000 users across the state.
In a statement, Letitia James, New York Attorney General, said that crypto firms must know they should operate by the same regulations as the rest of the financial institutions. Further, she claimed that her office would hold them responsible in case they failed to do so.
James also said she would continue taking action against any form that blatantly disrespects the law and endangers citizens’ investment and savings.
For a long time, New York has taken pride in being one of the most limiting crypto regulations in the U.S. In 2015, Kraken, a crypto exchange, exited the state and criticized the new BitLicense crypto registration regulations. It claimed the laws were ‘harsh,’ ‘nasty,’ and ‘abominable.’ Two months ago, California approved a similar crypto regulation guideline to implement in July 2025.
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