A planned settlement between the U.S. Commodity Futures Trading Commission (CFTC) and KuCoin is facing uncertainty due to a shift in the agency’s strategy to deprioritize enforcement actions against crypto firms, a decision influenced by the Trump administration.
In a letter to U.S. District Judge Valerie Caproni, CFTC attorney John Murphy indicated that securing internal approval for the negotiated deal, which began under the Biden administration, will take time. This development follows comments from acting CFTC Chair Caroline Pham, who stated that the enforcement division has been instructed to reduce its cases against cryptocurrency companies.
The CFTC charged KuCoin in March 2024 for multiple violations of the Commodity Exchange Act and agency regulations. Parallel criminal charges were also filed by the U.S. Department of Justice (DOJ), accusing KuCoin and two of its founders of facilitating over $9 billion in suspicious and illicit transactions. The DOJ reached a $297 million settlement with the exchange in January, mandating KuCoin’s exit from the U.S. market for at least two years.
The CFTC and KuCoin previously indicated an agreement in principle to settle their case, but specific details remain undisclosed. KuCoin’s request to delay proceedings for 14 days to align negotiations with President Trump’s executive order on digital asset enforcement was denied by the judge, who required regular updates on the case. Additionally, the CFTC faces an internal stalemate, lacking a majority vote due to an equal number of Democratic and Republican commissioners, which hinders the approval of any settlement or case dismissal. Acting Chair Pham has noted that reversing ongoing enforcement actions is more challenging than stopping new ones.
The deadlock could be resolved if the Senate confirms Brian Quintenz, a Trump nominee, to lead the Commission, potentially tipping the balance in favour of a resolution. Until then, both parties have jointly requested a 60-day extension or further guidance from the Commission.
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