KuCoin faces legal issues with Southern District of New York prosecutors (SDNY) as well as the Commodity Futures Trading Commission after being accused of conducting an unregulated agency that transferred money and failing to fulfill the anti-money laundering (AML) requirements under section 21 of the Bank Secrecy Act, Cryptopolitan reported earlier.
Regardless of the ongoing investigations, they have issued to their users that their assets are safe and that KuCoin keeps working. The allegations were made public by the exchange on their official social media platform with the statement that they are currently exploring all facets of the allegations with the help of a professional team of lawyers.
Furthermore, the exchange restated its full compliance with the law of every country they operate in and their readiness to respect these laws. It is essential to know that this response came alongside a brief dip in the value of KuCoin’s native token, KuCoin Token (KCS), which saw a 12% decline, trading at $12.64 following the announcement.
The criminal accusations framed that KuCoin operated significant financial amounts within the U.S.A without registration with the CFTC or the Financial Crimes Enforcement Network as a money transmitter. These are structured so that the exchange allowed U.S.A users to operate with no license. A rough estimate showed that these were more than 18 percent of the exchange’s total users in 2018.
Prosecutors also claim that more than 9 billion dollars of criminal and suspicious proceeds were processed by KuCoin since its start in 2017, revealing that its growth was due to the no-KYC policy. Additionally, the CFTC unsealed complaint suggested that KuCoin, from July 2019 to June 2023, offered and executed commodity transactions and derivatives to U.S. residents without knowing its customers in the process using no-KYC and no other identity verification mode, which identifies and blocks U.S users’ access.
Nonetheless, legal proceedings are still ongoing, and Kucoin Founders Chun Gan and Ke Tang, both Chinese nationals, have been charged. It is important to note that the allegations do not include mismanagement of users’ assets.
