China's Luckin Coffee has agreed to pay a $180 million penalty to settle accounting fraud charges, said the U.S. Securities and Exchange Commission (SEC) on Wednesday.

The coffeehouse chain "intentionally and materially overstated its reported revenue and expenses and materially understated its net loss in its publicly disclosed financial statements in 2019," said the SEC in a statement. 

"Without admitting or denying the allegations, Luckin has agreed to a settlement, subject to court approval, that includes permanent injunctions and the payment of a $180 million penalty," it added.

In a post on its official Weibo account, Luckin Coffee said it had reached a settlement with the SEC on the alleged financial fraud of some former employees, and, at present, the company and stores are operating normally.

Founded in October 2017 as Starbucks' rival, it took less than 18 months for the coffee company to be listed on the Nasdaq Stock Market (May 2019), but it ceased to trade on June 29 this year.

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(Cover: A Luckin Coffee outlet on Qianmen Street in Beijing, China, September 12, 2020. /CFP)