In a significant development within the cryptocurrency sphere, federal prosecutors in Manhattan have levied charges against KuCoin, one of the world’s largest cryptocurrency exchanges. The charges allege KuCoin’s violation of U.S. anti-money laundering laws, asserting that the exchange failed to appropriately vet customers, thus allowing billions of dollars in illicit funds to be transferred since its inception in 2017.
According to prosecutors, KuCoin, based in Seychelles, actively pursued business from U.S. customers without registering with the Treasury Department and neglecting to implement procedures to verify clients’ identities, as mandated by U.S. regulations.
In response to the allegations, KuCoin took to social media platform X to assure its users that their assets are secure and that the company’s legal team is actively investigating the accusations. The exchange emphasized its commitment to respecting the laws and regulations of various countries and maintaining strict compliance standards.
Notably, the founders of KuCoin, Chun Gan (34) and Ke Tang (39), both Chinese nationals, have also been charged with conspiracy. However, they currently remain at large, according to prosecutors.
In addition to the criminal charges, the U.S. Commodity Futures Trading Commission (CFTC) has initiated a civil lawsuit against KuCoin, alleging the exchange’s failure to register its futures and swaps activities with the regulatory body.
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This isn’t the first legal entanglement for KuCoin. In December, the exchange agreed to block users from New York and settle a lawsuit with the state for $22 million (ag.ny.gov), stemming from accusations of failure to register within the state.
Despite its prominence in the cryptocurrency realm, KuCoin trails behind industry giants such as Binance, Coinbase, and Kraken in factors including traffic, liquidity, and trading volumes, according to data from CoinMarketCap.
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The charges against KuCoin underscore the increasing regulatory scrutiny faced by cryptocurrency exchanges worldwide. As governments tighten their grip on the digital asset space, exchanges are compelled to prioritize compliance measures to ensure transparency and safeguard against illicit activities.