On Tuesday, a senior US prosecutor brought criminal charges against a once-ascending cryptocurrency startup and 2 of its founders, aiming to send a message to other industry players to observe US rules.
U.S. Attorney Damian Williams stated that KuCoin and two executives’ conspiracy charges should warn other cryptocurrency exchanges that companies must abide by U.S. laws to provide service to U.S. clients.
According to an indictment filed in Manhattan Federal Court, the corporation and its owners attempted to conceal the existence of their customer base in the United States.
The New York Attorney General in December (Letitia James) obtained a settlement of more than $22 million from KuCoin, which will then repay $16.7 million to over 150,000 New York investors and provide over $5.3 million to the state.
KuCoin was also ordered to halt operations in New York after falsely claiming to be a cryptocurrency exchange without first registering as a securities and commodities broker-dealer, according to James.
William said that KuCoin, founded in 2017, “took advantage of its sizeable U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, with billions of dollars of daily trades and trillions of dollars of annual trade volume.”
He claimed that the corporation purposefully opted to violate U.S. regulations aimed at detecting and eliminating crime and illicit financing schemes on financial platforms. As a result, investigators claim the organization was used to launder enormous quantities of money from criminal malware, ransomware, and fraud activities.
KuCoin failed to implement even basic anti-money laundering rules, allowing consumers to handle over $4 billion in questionable and criminal assets. Williams stated that KuCoin worked in the shadows of the financial markets, giving a place of refuge for illegal money laundering.
According to Darren McCormack, head of Homeland Security Investigations’ New York office, the prosecution exposes one of the world’s major cryptocurrency exchanges as a multibillion-dollar criminal enterprise.
“KuCoin grew to service over 30 million customers, despite its alleged failure to follow laws necessary to ensuring the security and stability of our world’s digital banking infrastructure,” McCormack said in a statement.
In a social media post, the corporation stated that it was “operating well, and the assets of our users are absolutely safe.”
It said, “We are aware of the related reports and are currently investigating the details through our lawyers.” KuCoin respects the laws and regulations of numerous nations and closely follows compliance standards.”
Prosecutors said that the men’s failure to verify customers, file any suspicious activity reports that are standard in the financial industry, and maintain an effective anti-money laundering program prevented KuCoin from being used for money laundering and terrorist financing, which led to the Bank Secrecy Act charge.
Three KuCoin corporations have been formed in the Cayman Islands, the Republic of Seychelles, and Singapore. They also faced conspiracy accusations.
On the KuCoin website on Tuesday, U.S. citizens were greeted with the following message: “Based on your IP address, we currently do not provide services in your country or region due to local laws, rules, or policies. We regret any trouble this may create. If you live in a region where our services are available, please access our site from a supported location to complete KYC verification.”
The company says that over 200 nations and regions globally have 30 million registered users.
- Published By Team Genuine Reporter