A planned settlement between the U.S. Commodity Futures Trading Commission (CFTC) and crypto exchange KuCoin is now in limbo due to a reported policy shift within the CFTC. This change is attributed to the Trump administration’s new approach, which deprioritizes enforcement actions against crypto companies. As a result, a CFTC attorney told a New York federal judge that it is “unlikely that such authorization will be granted in the near term” regarding the settlement approval.
Background and Case Status
- The CFTC charged KuCoin in March 2024 with multiple violations of the Commodity Exchange Act, including operating an illegal derivatives exchange and failing to implement necessary anti-money laundering (AML) and know-your-customer (KYC) procedures.
- KuCoin had previously agreed to a $297 million settlement with the Department of Justice (DOJ) in January 2025, which included exiting the U.S. market for at least two years.
- Although the CFTC and KuCoin reached an agreement in principle to settle the case in December 2024, the terms were not disclosed, and the settlement is now stalled due to the lack of a majority within the CFTC to approve it.
Key Factors Affecting the Settlement
- The CFTC currently has an even split between Democratic and Republican commissioners, preventing a majority decision on settlements or dismissals.
- Acting CFTC Chair Caroline Pham announced in February 2025 that the agency would wind down its practice of “regulation by enforcement” in the crypto sector, making it harder to terminate active cases.
- Both the CFTC and KuCoin have requested additional time (60 days or until the Commission provides direction) to resolve the matter, but the court is pressing for more immediate updates.
Implications and Outlook
- The delay in settlement approval reflects broader uncertainty in U.S. crypto regulation as the CFTC reconsiders its enforcement priorities under the Trump administration1.
- The outcome could change if the Senate confirms a new CFTC chair, potentially shifting the commission’s balance and policy direction.
- Meanwhile, KuCoin remains barred from operating in the U.S. and faces ongoing scrutiny over its past compliance failures and the handling of suspicious transactions.
Summary Table: CFTC–KuCoin Case Timeline
| Date | Event |
|---|---|
| March 2024 | CFTC files civil enforcement action against KuCoin for CEA violations |
| December 2024 | CFTC and KuCoin reach agreement in principle to settle |
| January 2025 | KuCoin settles with DOJ for $297 million, agrees to exit U.S. market for 2+ years |
| February 2025 | CFTC signals shift away from enforcement-led crypto regulation |
| April 2025 | CFTC attorney tells judge settlement unlikely to be approved soon due to policy shift |
Conclusion
The CFTC’s evolving stance on crypto enforcement has cast uncertainty over its prospective settlement with KuCoin, with agency attorneys indicating that approval is unlikely in the near term. This reflects both internal gridlock and a broader regulatory pivot, leaving the case unresolved for now1.
