KuCoin’s Settlement With CFTC Stalls Amid Trump-Era Policy Shift

KuCoin’s CFTC Settlement in Limbo Following Trump Administration Policy Shift

A proposed legal settlement between crypto exchange KuCoin and the U.S. Commodity Futures Trading Commission (CFTC) faces new uncertainty due to a major regulatory policy change under the returning Trump administration. The delay is the latest development in a broader shift away from aggressive enforcement against crypto firms.

According to a court filing submitted on April 21 by CFTC attorney John Murphy, the Commission is unlikely to approve a previously negotiated settlement deal “in the near term.” The filing, addressed to U.S. District Judge Valerie Caproni, follows recent comments by Acting CFTC Chair Caroline Pham, who confirmed the agency is moving to deprioritize enforcement actions against digital asset companies.

“The change in approach has complicated the internal approval process,” Murphy noted in the letter, which was first reported by Law360.

Case Background: Charges and Prior Agreements

KuCoin, operated by Mek Global Limited, was charged by the CFTC in March 2024 with multiple violations of the Commodity Exchange Act (CEA) and related regulations. The U.S. Department of Justice (DOJ) also brought criminal charges against the exchange and its two founders for failing to implement adequate Anti-Money Laundering (AML) measures, stating that over $5 billion was received and more than $4 billion in suspicious transactions were processed through the platform.

In January 2025, KuCoin reached a $297 million settlement with the DOJ, which included an agreement to exit the U.S. market for at least two years.

Separately, in December 2024, the CFTC and KuCoin notified the court that they had reached a settlement agreement in principle. However, the deal’s specifics were not publicly disclosed.

In March 2025, KuCoin requested a 14-day stay to align the settlement with President Trump’s executive order directing agencies to curtail enforcement actions against crypto companies, but Judge Caproni denied the request, instead pressing for updates on the status of negotiations.

Regulatory Gridlock at the CFTC

One of the central roadblocks in finalizing the settlement is the lack of a majority at the CFTC. The Commission is currently deadlocked, with two Democratic and two Republican commissioners, preventing it from either approving a settlement or dismissing the case altogether.

Acting Chair Pham acknowledged in February that winding down ongoing enforcement cases would be significantly more complex than simply deprioritizing new actions. Any major decision, including settlements, still requires a majority vote.

That deadlock may soon be broken if Trump-nominated Brian Quintenz, a known crypto advocate and former CFTC commissioner, is confirmed by the Senate to lead the agency.

Looking Ahead: Waiting for Direction

Both the CFTC and KuCoin have asked the court for an additional 60 days or until the Commission can provide “definitive direction” on how to proceed.

Meanwhile, the CFTC appears to be shifting its focus toward understanding crypto markets rather than policing them. On April 21, its Division of Market Oversight issued a formal request for comment on the role of perpetual contracts in derivatives markets.

“Innovation and new technology have created a renaissance in markets,” said Pham, noting the CFTC’s intent to explore both the opportunities and risks that such products bring.

Conclusion

KuCoin legal saga underscores the impact of political transitions on regulatory enforcement in the crypto space. With the CFTC’s leadership in flux and broader federal policy shifting toward a more crypto-friendly stance, the outcome of this case may set a precedent for how future enforcement actions — or their reversals — are handled in the Trump administration’s second term.