The Commodity Futures Trading Commission (CFTC) and KuCoin have hinted at fruitful negotiations that may put an end to a lawsuit brought by the regulator earlier in 2024.
In a letter addressed to Judge Valerie E. Caproni of the New York Southern District Court, the parties stated that they have made substantial progress towards negotiating a potential resolution of this matter.
The parties, however, require additional time to conclude their negotiations, particularly in light of a parallel filed criminal action The parties jointly requested an extension of all deadlines and appearances by 60 days.
In March 2024, the CFTC filed a civil enforcement action in the U.S. District Court for the Southern District of New York charging Mek Global Limited, PhoenixFin PTE Ltd., Flashdot Limited, and Peken Global Limited, which collectively operate a centralized digital asset exchange under the name KuCoin, with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations.
The complaint charges KuCoin illegally dealt in off-exchange commodity futures transactions and leveraged, margined, or financed retail commodity transactions; solicited and accepted orders for commodity futures, swaps, and leveraged, margined, or financed retail commodity transactions without registering with the CFTC as a futures commission merchant (FCM); failed to diligently supervise its FCM activities; operated a facility for the trading or processing of swaps without registering with the CFTC as a swap execution facility (SEF) or designated contract market (DCM); and failed to implement an effective customer identification program (CIP).
In its continuing litigation against KuCoin, the CFTC seeks disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations, as charged.
