Cryptocurrency exchange KuCoin asserts that its users’ assets are secure despite facing criminal and civil allegations from the United States Southern District of New York (SDNY) prosecutors and the Commodity Futures Trading Commission (CFTC) on March 26.
“KuCoin is operating smoothly, and our users’ assets are completely safe,” the exchange stated. “We are aware of the reports and are investigating the details with our legal team. KuCoin respects the laws and regulations of various countries and strictly adheres to compliance standards.” Shortly after, the exchange tweeted again, seemingly unaffected by the day’s events:
“Did you mean KuCoin? That’s where I discovered my 100x CryptoGems.”
Meanwhile, KuCoin’s native token, KuCoin Token (KCS), has experienced a 12% decline in value over the past 24 hours, currently trading at $12.64. Earlier, the U.S. SDNY announced criminal charges against KuCoin co-founders Chun Gan and Ke Tang, both Chinese nationals. They are accused of conspiring to operate an unlicensed money-transmitting business and violating the Bank Secrecy Act by failing to maintain an adequate anti-money laundering (AML) program.
Prosecutors allege that despite significant operations in the U.S., KuCoin did not register with the CFTC or the Financial Crimes Enforcement Network as a proper money transmitter. Additionally, the exchange onboarded U.S. users without proper licensing, with these users comprising over 18% of the exchange’s user base in 2018.
“Since its establishment in 2017, KuCoin has handled over $5 billion in suspicious and criminal proceeds,” prosecutors claim. “KuCoin’s no-KYC policy was fundamental to its growth and success.”
According to the parallel CFTC complaint, KuCoin “offered and executed commodity derivatives and leveraged, margined, or financed commodity transactions to and for individuals in the U.S.,” from around July 2019 to June 2023, failing to implement required know-your-customer (KYC) procedures. The CFTC alleges that KuCoin did not enforce IP verification procedures to block U.S. users’ access during this period.
Both criminal and civil proceedings are ongoing, with co-founders Chun Gan and Ke Tang currently at large. Despite the allegations, neither prosecutors nor regulators have accused KuCoin of mismanaging users’ assets.
