A planned settlement between the US Commodity Futures Trading Commission and crypto exchange KuCoin will likely be delayed after a policy shift at the CFTC to deprioritize cases against crypto companies under the Trump administration.
CFTC attorney John Murphy submitted a letter on April 21 to District Judge Valerie Caproni, asking for more time to secure approval for a deal negotiated under the Biden administration, reported Law360.
“It appears unlikely that such authorization will be granted in the near term,” he said, referencing a recent statement by acting CFTC Chair Caroline Pham that the agency’s enforcement division was to deprioritize cases against crypto companies.
The CFTC charged KuCoin with “multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations” in March 2024.
According to the Justice Department, which also filed charges against KuCoin and two founders for violating Anti-Money Laundering laws, the exchange received more than $5 billion and sent more than $4 billion in “suspicious and criminal funds.”
KuCoin, trading under Mek Global Limited, reached a $297 million settlement with the Department of Justice in January and agreed to exit the US market for at least two years.
In December, the CFTC and KuCoin informed the court that they reached an agreement in principle to settle the case, however terms and details of the proposed deal were not disclosed.
In March, KuCoin asked the judge for a 14-day stay to address further negotiations in line with President Trump’s executive order curtailing enforcement actions against the digital asset industry. However, this request was denied, with the judge pressing for negotiation status updates.
No majority at CFTC
When Pham announced in February that the Commission would wind down its practice of regulation by enforcement, she also noted that terminating active cases would be more difficult to deal with.
The CFTC needs a majority to dismiss a case or authorize its settlement, and there is currently no majority, with two members from each party sitting on its governing body.
This could change if the Senate confirms the appointment of Trump nominee Brian Quintenz to lead the financial regulator.
Both parties have requested an additional 60 days or until the Commission provides “definitive direction” on the matter.
Related: US regulators FDIC and CFTC ease crypto restrictions for banks, derivatives
On April 21, the CFTC’s Divisions of Market Oversight issued a request for comment to better inform them on the potential uses, benefits, and risks of perpetual contracts in derivatives markets.
“Innovation and new technology have created a renaissance in markets that presents new opportunities that are accessible to more people, as well as risks,” said Pham.
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