Business News Report
March 27, 2024

KuCoin Faces Over $1.1B Outflows Following United States Department of Justice Charges 

In Brief

KuCoin experienced a net outflow of $1.195 billion within the last 24 hours while retaining $4.02 billion in assets following DOJ charges.

KuCoin Faces Over $1.1B Outflows Following United States Department of Justice Charges 

Cryptocurrency exchange KuCoin experienced a net outflow of around $1.195 billion within the last 24 hours while retaining approximately $4.02 billion in assets, including its exchange tokens, according to data from the analytics platform 0xscope. This significant outflow coincided with the United States Department of Justice’s (DOJ) charging the exchange for violating the anti-money laundering regulations and the Bank Secrecy Act.

Yesterday, the DOJ filed charges against KuCoin and two of its founders, Chun Gan and Ke Tang. The indictment implies that KuCoin avoided compliance with United States AML and Know Your Customer (KYC) regulations by falsely asserting it lacked United States customers, despite having a significant base of such customers. Allegations suggest that KuCoin enabled its platform to facilitate the laundering of more than $9 billion.

CFTC’s Crypto Classification Amid KuCoin Indictment Challenges SEC’s ETH Scrutiny 

Alongside the DOJ indictment against KuCoin, the Commodity Futures Trading Commission (CFTC) initiated a parallel civil action. The CFTC has labeled digital assets such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and stablecoins as “commodities” in interstate commerce, in accordance with Section 1a(9) of the Act, 7 U.S.C. § 1a(9).

According to Jake Chervinsky, Chief Legal Officer of Variant Fund venture capital, both the SEC and CFTC typically uphold a neutral stance regarding their jurisdictional boundaries in the cryptocurrency realm. However, the CFTC’s recent actions appear to challenge the SEC’s reported investigation into ETH.

This development holds particular significance as the securities regulator currently endeavors to categorize ETH as security, introducing further regulatory scrutiny to the cryptocurrency ecosystem and reflecting ongoing efforts by authorities to navigate the classification and oversight of digital assets.

Despite the ongoing adversaries, the exchange stated, “KuCoin is operating smoothly, and the assets of our users are secure.” Johnny Lyu, CEO of KuCoin, acknowledged the related reports and mentioned ongoing investigations with legal counsel, emphasizing its commitment to respecting the laws and regulations of different countries and maintaining compliance standards.

Highlighting the awareness of the charges, Johnny Lyu asserted that the exchange remains unaffected. “While we’re addressing the issue, the platform continues to operate normally. Your assets remain safe and secure with us,” said Johnny Lyu in a post on social media platform X.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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