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KuCoin faces federal prosecution for anti-money laundering and registration avoidance

On Tuesday (March 26), federal prosecutors in New York announced charges against leading cryptocurrency exchange KuCoin for violating U.S. anti-money laundering laws.

The charges accuse the Seychelles-based company of neglecting to properly vet its clients, allegedly allowing billions of dollars in illicit funds to be transferred since its inception in 2017. Prosecutors argued that KuCoin illegally solicited business from U.S. customers without conducting the required registrations with them. The Treasury Department may implement customer identity verification procedures consistent with U.S. law.

KuCoin responds to relevant accusations Social Media PlatformX, assuring customers that their assets are safe and that its legal team is handling claims. The company emphasized its commitment to complying with various countries’ legal and regulatory standards.

Further compounding KuCoin’s legal troubles, the exchange’s founders Gan Chun and Tang Ke, 34 and 39-year-old Chinese nationals respectively, have been charged with conspiracy and are currently evading arrest. According to a press release from the U.S. Attorney’s Office for the Southern District of New York:

Gan, 34, and Tang, 39, both Chinese nationals, are each charged with one count of conspiring to violate the Bank Secrecy Act and one count of conspiring to operate an unlicensed money transfer business, with each count punishable by up to five years in prison. Sent to jail for many years.

In another legal development, the U.S. Commodity Futures Trading Commission (CFTC) has filed a civil lawsuit against KuCoin. The lawsuit accuses the company of failing to register its futures and swaps activities with regulators.

The legal action follows a December settlement in which KuCoin agreed to ban New York residents from using its platform and pay $22 million to resolve the state’s lawsuit. The exchange was accused of operating within the United States without a license.

part of wider crackdown

U.S. regulators are taking another wave of action against players in the cryptocurrency industry. As ReadWrite reported earlier this week, the U.S. Securities and Exchange Commission (SEC) has approached a New York judge seeking to fine Ripple Labs nearly $2 billion.

Early Ethereum (ETH) advisor Steven Nerayoff also recently expressed serious concerns about the U.S. Securities and Exchange Commission’s (SEC) investigation into Ethereum.

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