KuCoin, a cryptocurrency exchange, has stated that its users’ assets are secure despite facing legal action from the United States Southern District of New York (SDNY) prosecutors and the Commodity Futures Trading Commission (CFTC). The exchange reassured its users that it is operating smoothly and is currently investigating the allegations through its legal team. KuCoin emphasized its commitment to complying with laws and regulations in various countries.
Meanwhile, the value of KuCoin’s native token, KuCoin Token (KCS), has dropped by 12% in the last 24 hours and is currently trading at $12.64. Earlier in the day, the U.S. SDNY announced criminal charges against KuCoin’s co-founders, Chun Gan and Ke Tang, both of whom are Chinese nationals. The charges include operating an unlicensed money-transmitting business and failing to maintain an adequate anti-money laundering program.
According to prosecutors, despite having significant operations in the U.S., KuCoin did not register with the CFTC or the Financial Crimes Enforcement Network as a legitimate money transmitter. Furthermore, the exchange allegedly onboarded U.S. users without proper licensing, with these users accounting for over 18% of the exchange’s user base in 2018.
Prosecutors claim that KuCoin has handled over $5 billion in suspicious and criminal proceeds since its establishment in 2017. They argue that KuCoin’s lack of know-your-customer (KYC) procedures was essential to its growth and success.
The CFTC also filed a complaint against KuCoin, accusing the exchange of offering and executing commodity derivatives and leveraged transactions for U.S. individuals without implementing the required KYC compliance procedures. The CFTC alleges that KuCoin did not impose IP verification procedures to block U.S. users’ access during this period.
Both criminal and civil proceedings are ongoing, and the co-founders, Chun Gan and Ke Tang, are currently evading authorities. However, neither prosecutors nor regulators have accused KuCoin of mishandling users’ assets.
In response to the allegations, KuCoin has assured its users that their funds are not locked. The situation continues to develop as the legal proceedings progress.