KuCoin-CFTC Settlement Hits Roadblock Amid Policy Shift in the US

A planned legal settlement between the U.S. Commodity Futures Trading Commission (CFTC) and crypto exchange KuCoin now hangs in limbo, following a shift in enforcement priorities under the Trump administration.

In an April 21 letter to District Judge Valerie Caproni, CFTC attorney John Murphy indicated that authorization for the deal—initially negotiated under Biden’s tenure—may not be granted anytime soon.

“It appears unlikely that such authorization will be granted in the near term,” Murphy wrote, pointing to acting CFTC Chair Caroline Pham’s recent declaration that the agency would deprioritize enforcement against crypto firms. The shift reflects a broader executive directive from President Trump to ease regulatory pressure on the digital asset industry.

The original charges against KuCoin, filed by the CFTC in March 2024, accused the exchange of numerous violations of the Commodity Exchange Act. Parallel charges from the U.S. Justice Department alleged the exchange processed over $9 billion in suspicious funds. In January, KuCoin agreed to a $297 million settlement with the DOJ and committed to exiting the U.S. market for at least two years.

Stalled Deal, Uncertain Future

Though a preliminary agreement between KuCoin and the CFTC was reached in December, the full details have yet to be revealed. Negotiations hit another snag in March when the exchange requested a 14-day stay to reassess terms in light of Trump’s executive order. The judge, however, denied the request, demanding regular updates on settlement progress.

One major obstacle now lies in the CFTC’s leadership structure. The Commission is currently deadlocked, with an even partisan split—two Democratic and two Republican members—meaning no majority exists to approve a settlement or dismiss an ongoing case. That balance could tilt if the Senate confirms Trump’s nominee, Brian Quintenz, potentially giving Republicans the upper hand to influence crypto oversight policy.

Both KuCoin and the CFTC have now requested an additional 60-day window or until clearer direction emerges from the Commission.

Derivatives Under the Microscope

Amid the gridlock, the CFTC is not entirely idle. On April 21, its Divisions of Market Oversight issued a formal request for public feedback on the role of perpetual contracts in the derivatives market. Chair Pham framed the inquiry as a way to foster innovation while maintaining investor protection.

“Innovation and new technology have created a renaissance in markets,” she said, “but it’s one that comes with both opportunity and risk.”