KuCoin Assures User Asset Security Amidst Legal Controversy and Falling Token Value
Summary:
In response to criminal and civil charges filed by the SDNY and CFTC, KuCoin reassures its users that their assets are secure. Despite this, their native token (KCS) lost 12% of its value. The SDNY accused co-founders Chun Gan and Ke Tang of running an unlicensed money-transmitting business. Although KuCoin operates within the US, it failed to register with key US bodies. Furthermore, it onboarded US users without the proper licensing. Both co-founders remain at large. Yet, no allegations of mismanaging users' assets have been raised against KuCoin.
In response to criminal and civil charges brought forth by the prosecutors of the Southern District of New York (SDNY) and the Commodity Futures Trading Commission (CFTC), KuCoin, a prominent cryptocurrency exchange, has assured its users that their investments remain secure. "KuCoin has functioned flawlessly and our users' assets are completely secure," said the exchange. "We are mindful of the relevant reports and exploring the specifics with the help of our attorneys. KuCoin is devoted to adhering to the laws, regulations, and compliance standards of various nations." Later, KuCoin tweeted again, demonstrating resilience against the fresh allegations. "KuCoin is where I discovered my 100x CryptoGems," it wrote. Nevertheless, KuCoin's KCS token lost 12% of its value within 24 hours, dropping to $12.64 at the point of reporting. Previously, the SDNY slapped criminal charges on KuCoin's co-founders Chun Gan and Ke Tang, both citizens of China, who have been accused of conspiring to run an unlicensed money-transmitting operation and neglecting to maintain an effective anti-money laundering program. Although KuCoin primarily operates within the U.S., prosecutors emphasize that it failed to register with the CFTC or the Financial Crimes Enforcement Network as a legitimate money transmitter. Furthermore, despite claiming compliance with U.S. regulations, KuCoin accepted U.S. users sans the appropriate licensing, who constituted more than 18% of its user base in 2018. According to the prosecution, since its inauguration in 2017, "KuCoin has received around $5 billion and disbursed another $4 billion, of questionable and illegal proceeds." The CFTC, in a concurrently filed complaint, accused KuCoin of trading commodity derivatives and enabling leveraged transactions for U.S. individuals between July 2019 and June 2023, without implementing mandatory customer identification protocols. During this period, the CFTC claims, KuCoin had no IP-verification procedures to prevent U.S. users from accessing its services. Co-founders Chun Gan and Ke Tang have so far avoided arrest, as both criminal and civil legal proceedings continue. Nevertheless, neither prosecutors nor regulators have leveled accusations against KuCoin for mismanaging users' assets.
Published At
3/26/2024 8:39:55 PM
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