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KuCoin sees outflow of more than $1 billion after US money laundering allegations

KuCoin may be required to take steps to clean up its image and clarify accusations in order to regain the trust of users and investors.

Date: 2024-03-27 Author: Łukasz Michałek
KuCoin sees outflow of more than $1 billion after US money laundering allegations

Cryptocurrency exchange KuCoin has seen an outflow of more than $1 billion in the past 24 hours after U.S. prosecutors announced charges against the exchange and two of its founders, Chun Gan and Ke Tang, for violating anti-money laundering laws.

The U.S. Department of Justice revealed in its indictment that the cryptocurrency exchange was not registered with any U.S. government entity, despite the fact that it operated a remittance business and provided services to more than 30 million customers.

The exchange also had no KYC (know your customer) or AML (anti-money laundering) program until 2023.

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KuCoin’s reserves fall after U.S. Justice Department indictment

Scopescan, a supply chain analytics firm, says more than $1 billion has flowed off the platform in the past 24 hours. All of the KuCoin networks currently have a balance of $3.821 billion, before the allegations it was $4.8 billion. More than $274 million in USDT, more than $155 million in Ethereum and $90 million in BTC have flowed off the exchange in the past 24 hours.

After the Justice Department filed an indictment against the KuCoin exchange, several cryptocurrency whales also began withdrawing money from the exchange.

Facing a criminal investigation in the U.S. in 2023 and increasing regulatory pressure from China, KuCoin was reportedly considering closing or selling the exchange. Rumors of a potential takeover have even reached competitors such as Binance.

CFTC marks ETH as a commodity

The U.S. CFTC has classified several major digital assets, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and stablecoins such as USDC and USDT, as “commodities” in its complaint against KuCoin. This indictment sheds new light on the SEC ‘s ongoing investigation of the Ethereum Foundation, which reportedly intends to classify Ether (ETH) as a security.

The CFTC further stated that it seeks “disgorgement, civil monetary penalties, a permanent injunction against trading and registration, and a permanent injunction against further violations of the CEA and CFTC regulations as alleged.”

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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