Meta Description: KuCoin faces charges for bypassing US anti-money laundering laws, with founders potentially facing jail time as exchange vows compliance.
Key Insights:
●KuCoin accused by US of lax screening, allowing illicit fund transfers since 2017. Founders face serious charges.
●KuCoin and founders charged for not registering with US Treasury, risking up to 10 years in jail for compliance failures.
●Despite legal challenges, KuCoin ensures users’ assets are secure, resolving past issues with a $22M settlement in New York.
One of the biggest cryptocurrency exchanges, KuCoin, was accused by federal prosecutors in Manhattan on Tuesday of breaking American anti-money laundering regulations by neglecting to thoroughly screen its users, allowing billions of dollars worth of illicit funds to be transferred since the company’s founding in 2017.
The exchange, which is based in Seychelles, was accused by prosecutors of soliciting business from American clients without first registering with the Treasury Department and setting up the necessary processes to authenticate clients’ identities as mandated by US law.
Chun Gan and Ke Tang, two of KuCoin’s founders, were also accused of conspiratorial offenses by the prosecution.
https://twitter.com/Athene_Networkr/status/1772908463577759864
US Charges KuCoin
The derivatives market regulator, the U.S. Commodity and Futures Trading Commission, filed parallel civil charges against KuCoin on Tuesday for operating as an unauthorized exchange for digital asset derivatives and for numerous violations of the Commodity Exchange Act.
Both Chinese nationals Gan and Tang could spend up to ten years in jail if found guilty of the charges.
In an email, a KuCoin representative stated that the exchange respects the “laws and regulations of various countries and strictly adheres to compliance standards.” The exchange is aware of the related reports and is looking into the details through its lawyers.
In total, KuCoin is charged with helping to launder $4 billion in withdrawals and over $5 billion in deposits of suspicious funds.
In a post on X (formerly Twitter), KuCoin CEO Johnny Lyu addressed the accusations, stating that he learned of the regulatory matter about KuCoin and that the platform is unaffected and running as usual while they are working on it. He added that users’ assets are in good hands.
https://x.com/lyu_johnny/status/1772655006996398519?s=20
In December, KuCoin consented to pay $22 million to resolve the state’s lawsuit alleging that it was not registered in New York and to bar users from using its platform.
According to data company CoinMarketCap, KuCoin lags behind cryptocurrency spot exchanges Binance, Coinbase, and Kraken in terms of traffic, liquidity, and trading volumes.
KuCoin Users Withdraw over $1.2 Billion amid US Charges
About $500 million worth of assets were removed from the platform on the Ethereum blockchain alone after the criminal complaint filed by the US government.
Significant withdrawals from KuCoin’s Ethereum holdings in the last few hours, including 274 million USDT and 15,500 ETH, are highlighted by data from SpotOnChain. The exchange’s Ethereum hot wallets are still holding more than $3.6 billion in assets despite this.
Furthermore, according to 0xscope, KuCoin had a net outflow of about $1.195 billion during the previous day. Even so, the exchange’s $4.02 billion asset base—which includes exchange tokens—remains substantial.
WuBlockchain revealed that KuCoin had contemplated shutting down and selling off in 2023, which was a shocking development. This follows multiple inquiries in China and a criminal investigation headed by the United States.
https://twitter.com/WuBlockchain/status/1772807207123599620
The US indictment also highlights KuCoin’s purported failures in customer identity verification and anti-money laundering measures. According to reports, these holes allowed KuCoin to act as a conduit for illegal money, which led to over $9 billion in dubious transactions.
However, the cryptocurrency space has witnessed a recent surge in technological development, particularly with the introduction of the AI Crypto Trade Bot. This cloud-based AI cryptocurrency trading bot uses a preprogrammed, algorithmic trading approach. This means that customers can now use outside signals to make well-informed trades.
