One of the biggest cryptocurrency exchanges in the world, KuCoin, and two of its founders were prosecuted by US prosecutors for violating American anti-money laundering regulations.
Manhattan federal prosecutors asserted on Tuesday that since KuCoin's launch in September 2017, the exchange has "willfully failed" to implement and sustain a program that prevents the platform from being utilized for illegal activities, including as terrorist funding.
The US Attorney's Office for the Southern District of New York reported that the corporation failed to implement adequate measures to confirm the identities of consumers or report any questionable transactions on the exchange.
The defendants enabled KuCoin to function underground and serve as a sanctuary for illegal money laundering since they did not execute even fundamental anti-money laundering regulations, according to US Attorney Damian Williams. Additionally, he mentioned that over $4 billion in questionable and illicit funds were sent and received by the exchange, totaling over $5 billion.
On Tuesday, the business was also hit with a case by the Commodity Futures Trading Commission, the regulatory body in charge of derivatives markets.
People started fleeing KuCoin as soon as the news broke. Data from CryptoQuant shows that the exchange had its largest single-day net outflow of stablecoins since FTX's crash in November 2022, totaling $278 million.
The corporation issued a statement stating, "KuCoin is operating well, and the assets of our users are absolutely safe" in reaction to the accusations. "We are cognizant of the reports in question and are actively pursuing a thorough investigation into the matter through our legal counsel." Additionally, KuCoin stated that it "strictly adheres to compliance standards" and honors "the laws and regulations of various countries."
The prosecution asserted that the business hid the fact that the site had many American users so that it might avoid US regulations. According to Williams, "if you plan to serve US customers, you must follow US law, plain and simple." This should be sent as a clear message to other cryptocurrency exchanges by today's indictment.
With a daily trading volume of over $2 billion, KuCoin is one of the biggest spot crypto exchanges in the world, according to CoinMarketCap.
Stay turned for development