KuCoin has partnered with the multinational regulation agency A&O Shearman to deal with ongoing lawsuits from the U.S. Division of Justice (DOJ) and the Commodity Futures Buying and selling Fee (CFTC). The corporate has additionally engaged in a number of communication rounds with the companies.
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CEO Johnny Lyu has expressed optimism concerning the final result of those conferences. In line with blockchain reporter Colin Wu, Lyu has stated that KuCoin is making large efforts to enhance its operations, specializing in safety and compliance.
CFTC Accuses KuCoin of Unlawful Commodity Transactions
In March, the CFTC filed a lawsuit towards KuCoin. The lawsuit accused the alternate of illegally dealing in off-exchange commodity futures transactions and leveraged, margined, or financed retail commodity transactions. The CFTC additionally acknowledged that KuCoin solicited and accepted orders for these transactions with out correct registration.
The swimsuit additional detailed that KuCoin allowed traders to commerce commodities, together with Bitcoin, Ethereum, and Litecoin. This introduced the alternate below the CFTC’s jurisdiction and required it to adjust to all relevant laws.
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The CFTC seeks disgorgement, civil financial penalties, everlasting buying and selling and registration bans, and a everlasting injunction towards additional violations of the Commodity Change Act (CEA) and CFTC laws. Following the CFTC’s criticism, the DOJ additionally filed a lawsuit towards the alternate and two of its co-founders. The DOJ’s lawsuit alleges that the defendants violated the Financial institution Secrecy Act.
DOJ Claims KuCoin Did Not Implement AML Insurance policies
The DOJ additional alleged that KuCoin didn’t implement any anti-money laundering (AML) insurance policies, ensuing within the transmission of over $4 billion in suspicious and felony funds. The alternate additionally allegedly acquired $5 billion from working “within the shadows of the monetary markets.”
The DOJ claims that the alternate did not implement sufficient know-your-customer (KYC) procedures from July 2019 to June 2023. Curiously, in 2018, KuCoin introduced that it was implementing a brand new KYC system. Nonetheless, the discover acknowledged:
The KYC will not be obligatory, which suggests if shopper chooses to not full his/her KYC, the shopper might at all times commerce with none restrictions.
New York prosecutors stated within the criticism, “KuCoin’s no-KYC coverage was integral to its progress and success.” Lyu has emphasised the corporate’s dedication to working with regulators and policymakers. He stays optimistic about reaching a passable resolution for all stakeholders concerned with the assistance of A&O Shearman.
Cryptopolitan reporting by Jai Hamid