Crypto exchange KuCoin and two of its founders are in the crosshairs of US regulators for allegedly breaching bank secrecy and anti-money laundering laws. A new case that is shaking up the crypto industry.
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KuCoin nabbed for regulatory non-compliance
The US authorities have launched an offensive against KuCoin, one of the world’s largest cryptocurrency exchanges. This Tuesday, federal prosecutors indicted the platform and its founders, Chun Gan and Ke Tang for violating anti-money laundering laws.
According to the indictment, KuCoin would have operated as a money transfer company with over 30 million customers worldwide, without implementing an adequate customer identity checks (KYC) and anti-money laundering (AML) until 2023.
The authorities claim that this absence of controls has allowed KuCoin being used to launder money from criminal activities.
The indictment states, among other things, that KuCoin reportedly received over $3.2 million in crypto from the protocol Tornado Cash, which has been sanctioned several times.
A haven for illegal money laundering
In addition to the Department of Justice (DOJ), KuCoin is also the subject of a civil action brought by the Commodity Futures Trading Commission (CFTC), the U.S. securities regulator.
CFTC criticizes the platform for failing to register as a trader futures commission merchant, swap execution center or designated contract market, even though it offers spot and futures trading services.
The DOJ states that KuCoin actively tried to conceal the fact that a significant number of US users were transacting on its platform, enabling it to become one of the world’s largest crypto derivatives and cash exchanges.
The serious charges brought against KuCoin tarnish the image of this major player in the crypto ecosystem, whose native token KCS fell by 15% following these revelations. Once again, they raise the question of regulatory compliance in this still young and poorly regulated market.
Just a few months after the prosecution of Binance, the world’s leading crypto exchange, this new case involving KuCoin complicates the crypto industry’s efforts to gain credibility with regulators…
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
