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.
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.
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
