U.S. prosecutors say KuCoin was implicated in questionable cryptocurrency transactions worth $9 billion

U.S. prosecutors have charged KuCoin, one of the world’s largest cryptocurrency exchanges, and its two founders with failing to comply with U.S. anti-money laundering rules.

Federal prosecutors in Manhattan said that since KuCoin’s inception in September 2017, the exchange “willfully failed” to establish and maintain a plan to prevent the platform from being used for illegal activities, including terrorist financing. allegedly tuesday. The company also failed to put in place appropriate controls to verify customers’ identities or submit reports of suspicious transactions on the exchange, according to the U.S. Attorney’s Office for the Southern District of New York.

U.S. Attorney Damian Williams said in a statement: “The defendants failed to implement even basic anti-money laundering policies, resulting in KuCoin operating in the shadow of financial markets and being used to illegally launder money. safe haven.” He added that the exchange received more than $5 billion and sent more than $4 billion in suspicious and criminal funds.

The Commodity Futures Trading Commission, which regulates derivatives markets, also filed a lawsuit against the company on Tuesday.

This news triggered a stampede to grab money from KuCoin. According to CryptoQuant data, the exchange saw a net outflow of $278 million in stablecoins on Tuesday, which was the largest single-day outflow since the FTX crash in November 2022.

“KuCoin operates well and our users’ assets are absolutely safe,” the company said in a statement in response to the accusations. “We have been informed of relevant reports and are currently investigating the details through our lawyers.” KuCoin also said that it respects “the laws and regulations of various countries and strictly abides by compliance standards.”

Prosecutors said the company took steps to conceal the use of the platform by a large number of U.S. customers to claim it was exempt from U.S. requirements. “Today’s indictment should send a clear message to other cryptocurrency exchanges: If you plan to serve U.S. customers, you must comply with U.S. law, plain and simple,” Williams said.

KuCoin is one of the world’s largest spot cryptocurrency exchanges, with daily trading volume exceeding $2 billion, according to CoinMarketCap.

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