U.S. Charges Cryptocurrency Exchange with Failing to Prevent Illicit Activity

The U.S. Department of Justice has charged global cryptocurrency exchange KuCoin and two of its founders with financial crimes. The charges allege that KuCoin failed to comply with anti-money laundering (AML) regulations, allowing it to be used for money laundering and other criminal activities.
U.S. Attorney Damian Williams stated: “KuCoin allegedly took advantage of its sizeable U.S. customer base… They allegedly chose not to implement even basic anti-money laundering policies, allowing KuCoin to operate in the shadows.”

PROMINENT GLOBAL CRYPTOCURRENCY EXCHANGE KUCOIN AND TWO OF ITS FOUNDERS CRIMINALLY CHARGED WITH BANK SECRECY ACT AND UNLICENSED MONEY TRANSMISSION OFFENSES@HSINEWYORK HTTPS://T.CO/H39IUURZJZ
— US Attorney SDNY (@SDNYnews) March 26, 2024

X.com

Allegations of Unlicensed Operations and Lack of AML Compliance

The indictment accuses KuCoin of operating as an unlicensed money transmitter and failing to maintain an adequate AML program. According to the DOJ, KuCoin:

• Did not require customer identification until July 2023, after a federal investigation began.
• Never filed suspicious activity reports.
• Never registered with the proper financial regulatory agencies.
• Actively marketed itself to U.S. customers seeking to avoid AML regulations.

KuCoin Used for Laundering Billions

The DOJ alleges that KuCoin’s lack of AML compliance allowed it to be used to launder billions of dollars in criminal proceeds.
HSI Acting Special Agent in Charge Darren McCormack said: “Today, we exposed one of the largest global cryptocurrency exchanges… for what our investigation has found it to truly be: an alleged multibillion-dollar criminal conspiracy.”

Charges and Potential Penalties

The founders of KuCoin, Chun Gan and Ke Tang, are charged with conspiracy to violate the Bank Secrecy Act and conspiracy to operate an unlicensed money transmitting business. KuCoin itself faces similar charges. The maximum potential sentence for each charge is five to ten years in prison.
The press release mentioned that the investigation is ongoing, and the defendants are presumed innocent until proven guilty.

KuCoin CEO responds

The CEO of KuCoin, Johnny Lyu, responded to the news on Twitter, stating: 
“The regulatory matter related to KuCoin has come to my attention. While we’re working on it, the platform is unaffected and operating normally as usual. Your assets are safe and sound with us. Our team and I will provide timely updates about the progress.”
Notably, some Twitter users are responding under the tweet that their funds are not withdrawing. A few people commented that they didn’t believe the reassurance, as FTX stated the same thing online before the exchange’s implosion that rocked the crypto world. 

HMM   SAM BANKMAN SAID THE SAME THING A WEEK BEFORE EVERYTHING GOT FROZEN AND THE ENTIRE COMPANY EMPLODED
— SUGA SHANE tha BLOK ROCKER (@ShaneRyanKelly) March 26, 2024

X.com
Ironically, in a 2022 Forbes article with Johnny, KuCoin was at the fifth spot on CoinMarketCap’s ratings, “only topped by Binance, FTX, Coinbase and Kraken.” The article aslo noted that, “Three of the top four exchanges boast significantly deeper pockets than KuCoin.” Since then, we have seen the SEC now go after all of these exchanges in some form. 
KuCoin started small with a team of ten, mostly engineers. Their success came from launching their own token, KCS, which surged in value, and additionally by listing many altcoins early on. This attracted users through word-of-mouth promotion. On regulation, Lyu once stated he believes it can actually benefit cryptocurrency by creating a stable environment for growth.
The U.S. Department of Justice has charged global cryptocurrency exchange KuCoin and two of its founders with financial crimes. The charges allege that KuCoin failed to comply with anti-money laundering (AML) regulations, allowing it to be used for money laundering and other criminal activities.
U.S. Attorney Damian Williams stated: “KuCoin allegedly took advantage of its sizeable U.S. customer base… They allegedly chose not to implement even basic anti-money laundering policies, allowing KuCoin to operate in the shadows.”

PROMINENT GLOBAL CRYPTOCURRENCY EXCHANGE KUCOIN AND TWO OF ITS FOUNDERS CRIMINALLY CHARGED WITH BANK SECRECY ACT AND UNLICENSED MONEY TRANSMISSION OFFENSES@HSINEWYORK HTTPS://T.CO/H39IUURZJZ
— US Attorney SDNY (@SDNYnews) March 26, 2024

X.com

Allegations of Unlicensed Operations and Lack of AML Compliance

The indictment accuses KuCoin of operating as an unlicensed money transmitter and failing to maintain an adequate AML program. According to the DOJ, KuCoin:

• Did not require customer identification until July 2023, after a federal investigation began.
• Never filed suspicious activity reports.
• Never registered with the proper financial regulatory agencies.
• Actively marketed itself to U.S. customers seeking to avoid AML regulations.

KuCoin Used for Laundering Billions

The DOJ alleges that KuCoin’s lack of AML compliance allowed it to be used to launder billions of dollars in criminal proceeds.
HSI Acting Special Agent in Charge Darren McCormack said: “Today, we exposed one of the largest global cryptocurrency exchanges… for what our investigation has found it to truly be: an alleged multibillion-dollar criminal conspiracy.”

Charges and Potential Penalties

The founders of KuCoin, Chun Gan and Ke Tang, are charged with conspiracy to violate the Bank Secrecy Act and conspiracy to operate an unlicensed money transmitting business. KuCoin itself faces similar charges. The maximum potential sentence for each charge is five to ten years in prison.
The press release mentioned that the investigation is ongoing, and the defendants are presumed innocent until proven guilty.

KuCoin CEO responds

The CEO of KuCoin, Johnny Lyu, responded to the news on Twitter, stating: 
“The regulatory matter related to KuCoin has come to my attention. While we’re working on it, the platform is unaffected and operating normally as usual. Your assets are safe and sound with us. Our team and I will provide timely updates about the progress.”
Notably, some Twitter users are responding under the tweet that their funds are not withdrawing. A few people commented that they didn’t believe the reassurance, as FTX stated the same thing online before the exchange’s implosion that rocked the crypto world. 

HMM   SAM BANKMAN SAID THE SAME THING A WEEK BEFORE EVERYTHING GOT FROZEN AND THE ENTIRE COMPANY EMPLODED
— SUGA SHANE tha BLOK ROCKER (@ShaneRyanKelly) March 26, 2024

X.com
Ironically, in a 2022 Forbes article with Johnny, KuCoin was at the fifth spot on CoinMarketCap’s ratings, “only topped by Binance, FTX, Coinbase and Kraken.” The article aslo noted that, “Three of the top four exchanges boast significantly deeper pockets than KuCoin.” Since then, we have seen the SEC now go after all of these exchanges in some form. 
KuCoin started small with a team of ten, mostly engineers. Their success came from launching their own token, KCS, which surged in value, and additionally by listing many altcoins early on. This attracted users through word-of-mouth promotion. On regulation, Lyu once stated he believes it can actually benefit cryptocurrency by creating a stable environment for growth.

KuCoin 2023 growth + settlement

KuCoin capped off 2023 with ample user and trading volume growth. According to a report published by the exchange itself and summarized by Finance Magnates, their user base reached nearly 31 million, reflecting a 16% increase year-over-year. This growth was particularly strong in Latin America (34%), followed by the Middle East & Africa (27%) and Europe (25%). The report further highlighted a surge of 106% in spot trading volume.
Despite the positive year, KuCoin also faced regulatory hurdles. In December 2023, they reached a settlement of $22 million with the state of New York and agreed to stop offering services to users in the region. This settlement stemmed from charges of violating New York’s securities and commodities laws. Earlier in October, the exchange also landed on the UK’s Financial Conduct Authority’s (FCA) restricted list.
*Disclaimer: News content provided by Genfinity is intended solely for informational purposes. While we strive to deliver accurate and up-to-date information, we do not offer financial or legal advice of any kind. Readers are encouraged to conduct their own research and consult with qualified professionals before making any financial or legal decisions. Genfinity disclaims any responsibility for actions taken based on the information presented in our articles. Our commitment is to share knowledge, foster discussion, and contribute to a better understanding of the topics covered in our articles. We advise our readers to exercise caution and diligence when seeking information or making decisions based on the content we provide.

KuCoin 2023 growth + settlement

KuCoin capped off 2023 with ample user and trading volume growth. According to a report published by the exchange itself and summarized by Finance Magnates, their user base reached nearly 31 million, reflecting a 16% increase year-over-year. This growth was particularly strong in Latin America (34%), followed by the Middle East & Africa (27%) and Europe (25%). The report further highlighted a surge of 106% in spot trading volume.
Despite the positive year, KuCoin also faced regulatory hurdles. In December 2023, they reached a settlement of $22 million with the state of New York and agreed to stop offering services to users in the region. This settlement stemmed from charges of violating New York’s securities and commodities laws. Earlier in October, the exchange also landed on the UK’s Financial Conduct Authority’s (FCA) restricted list.
*Disclaimer: News content provided by Genfinity is intended solely for informational purposes. While we strive to deliver accurate and up-to-date information, we do not offer financial or legal advice of any kind. Readers are encouraged to conduct their own research and consult with qualified professionals before making any financial or legal decisions. Genfinity disclaims any responsibility for actions taken based on the information presented in our articles. Our commitment is to share knowledge, foster discussion, and contribute to a better understanding of the topics covered in our articles. We advise our readers to exercise caution and diligence when seeking information or making decisions based on the content we provide.