US Authorities Accuse KuCoin Crypto Exchange of Anti-Money Laundering Lapses

US Authorities Accuse KuCoin Crypto Exchange of Anti-Money Laundering Lapses

On March 26, federal prosecutors in Manhattan made a significant move by charging KuCoin, one of the globe’s largest cryptocurrency exchanges, with violations of U.S. anti-money laundering laws. The charges stem from allegations that KuCoin failed to properly vet its customers, thus enabling the transfer of billions of dollars in illicit funds since its establishment in 2017.

According to prosecutors, KuCoin, headquartered in Seychelles, actively pursued business from U.S. customers without adhering to the necessary regulatory procedures mandated by U.S. law. This includes the failure to register with the Treasury Department and implement identity verification measures for clients, which are essential components of anti-money laundering compliance.

In response to the charges, KuCoin took to social media platform X to reassure its customers about the safety of their assets. The exchange stated that its legal team is actively investigating the allegations and emphasized its commitment to respecting the laws and regulations of various countries, pledging strict adherence to compliance standards.

Furthermore, prosecutors have also implicated the founders of KuCoin, Chun Gan and Ke Tang, both Chinese nationals, with conspiracy charges. However, both individuals are currently at large, according to authorities.

In addition to the criminal charges, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil lawsuit against KuCoin. The lawsuit alleges that the exchange failed to register its futures and swaps activities with the regulator, further compounding the legal challenges faced by the cryptocurrency platform.

This development underscores the increasing regulatory scrutiny facing cryptocurrency exchanges, particularly regarding compliance with anti-money laundering regulations and registration requirements. It also serves as a reminder of the potential risks associated with engaging in unregulated or non-compliant activities within the cryptocurrency industry.

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