The United States accused KuCoin exchange of laundering 9 billion USD of dirty money - KCS fluctuate

According to the allegations, KuCoin and its two founding members disregarded US law to develop one of the largest cryptocurrency trading platforms today.

The United States Department of Justice (DOJ) has just announced an indictment against the global cryptocurrency exchange KuCoin, and two of the platform's founders, Chun Gan (Michael) and Ke Tang (Eric).

Accordingly, KuCoin was charged with being an illegal money transmitter and materially violating the Bank Secrecy Act. The other two figures were behind directing this organization to avoid anti-money laundering and terrorist financing programs, not maintaining customer identity verification (KYC) procedures or submitting any activity reports.

US Department of Justice prosecutor Damian Williams said:

"KuCoin and its founding team intentionally hid the large number of US users trading on the platform. The exchange has relied on a large customer base in the US to become one of the leading derivatives and currency exchange platforms largest cryptocurrency in the world, with billions of dollars traded every day.”

The indictment continues to clarify that financial institutions like KuCoin need to comply with US laws to help review and repel crime and other corruption schemes. Not only does it operate illegally in the US, the exchange also helps "shadow" the financial market and is used as a money laundering haven for criminals.

According to data compiled by the United States, KuCoin has received and processed transactions for more than 9 billion USD in dirty money.

At the same time, the Asset Futures Trading Commission (CFTC) also filed a parallel civil lawsuit against KuCoin. The Commission accused the company of providing both spot and futures trading services, without completing required registration procedures. The complaint also accuses KuCoin of failing to comply with CFTC KYC requirements.

In another statement, Homeland Security Investigations Special Agent in Charge Darren McCormack called KuCoin "a multi-billion dollar criminal conspiracy" and considered it one of the largest cryptocurrency exchanges in existence. .

FLASHDOT LIMITED (formerly known as hoenixfin Limited), PEKEN GLOBAL LIMITED and PHOENIXFIN PRIVATE LIMITED are three entities doing business together as the global cryptocurrency exchange KuCoin. GAN and TANG and a number of other members founded KuCoin in September 2017.

KuCoin's coin, KCS, "tumbled" more than 10% after the above bad news. Meanwhile, Bitcoin (BTC) price fluctuated nearly 1% compared to the previous day and is trading around the 70,000 USD mark.

After nearly a year of being sued by the New York government, KuCoin has agreed to pay a fine and stop providing services in this state according to the latest agreement.

According to Reuters, the KuCoin cryptocurrency exchange has agreed to withdraw from the New York market (USA) and pay $22 million to settle a lawsuit with the state government for disguised securities listing and lack of operations. license.

In the lawsuit, New York Attorney General (NYAG) Letitia James argued that the company failed to fulfill its registration obligations with NYAG, the US Securities and Exchange Commission (SEC) and the Financial Exchange Commission. Futures Assets (CFTC).

As a result, KuCoin allegedly sold unregistered securities in the form of KuCoin Earn, the exchange's lending and staking product. The attorney general's office also wants KuCoin to provide the identities of people who participated in purchasing securities or assets at the exchange six years ago. These allegations have forced KuCoin to cut its workforce by 30% and require strict identity verification (KYC) for all its customers.

KuCoin's agreement to leave New York also means it will stop providing securities and asset trading services, and users in this state will not be able to access the platform until the latest information is available.

According to the disclosure, KuCoin's $22 million fine includes payment of $5.3 million in fines to the state and $16.7 million in crypto to 177,800 New York investors.

Commenting on the incident, KuCoin CEO Johnny Lyu confirmed the news of paying the fine and leaving the New York market, and warned users to beware of the risk of being scammed because of the information surrounding the exchange situation.

Before Kucoin, NYAG had taken legal action against many other cryptocurrencies, including:

·      October 2023: Gemini crypto exchange, bankrupt crypto lending company Genesis along with former CEO Michael Moro, and investment firm DCG and CEO Barry Silbert for defrauding more than 230,000 investors, including at least 29,000 New Yorkers, with funds worth more than $1 billion.

·      January 2023: The Attorney General's Office further charged fraud against former Celsius CEO Alex Mashinsky and imposed a $45 million fine on Nexo at the same time.

KuCoin is a crypto exchange operating since 2017, currently holding the top 4 exchange position after Binance, Coinbase and Kraken. According to CoinMarketCap, the exchange's trading volume in the first half of this month reached 1.2 billion USD, less than 10% compared to Binance's figure of 17.2 billion USD.