KuCoin, one of the leading cryptocurrency exchanges, said in a recent interview that it is working with Allen Overy Shearman Sterling (A&O Shearman) in a bid to resolve ongoing lawsuits from the U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC).
The DOJ alleged KuCoin of violating money laundering laws.
A&O Shearman is a new legal powerhouse created by two of the world’s most prestigious law firms, Allen & Overy (UK) and Shearman & Sterling (US). On May 1, 2024, the two firms merged to create A&O Shearman, bringing together over 3,900 lawyers and 3,000 other staff across 47 offices worldwide.
The combined firm aims to provide clients with expertise in dealing with an increasingly complex legal and geopolitical landscape.
KuCoin is The USA’s Next Victim
KuCoin asserted that it always takes the DOJ and CFTC allegations seriously. Throughout the past year, the exchange has actively cooperated with regulators and lawmakers to create the most favorable conditions for investigations.
Further, KuCoin said it has partnered with community security platform Bugcrowd to strengthen its internal controls and prevent any potential misconduct by employees, or implement stricter anti-money laundering (AML) protocols and identify suspicious activities.
In March 2024, the DOJ indicted KuCoin and two of its founders, Chun Gan (Michael) and Ke Tang (Eric). The charges alleged that the exchange operated as an illegal money transmitter and violated the Bank Secrecy Act.
The two founders were said to have directed KuCoin to operate in violation of anti-money laundering (AML) and terrorist financing regulations. They were also accused of failing to maintain proper Know Your Customer (KYC) procedures and neglecting to submit required activity reports.
More Static For Cryptos In The USA
According to the indictment, KuCoin not only operated illegally within the US but also facilitated illicit activity by obscuring financial transactions and acting as a haven for money laundering. The charges claim KuCoin laundered over $9 billion.
Separately, the Commodity Futures Trading Commission (CFTC) filed a civil lawsuit against KuCoin for offering unregistered spot and futures trading services and failing to comply with KYC requirements.
In recent years, the US government has intensified its focus on regulating cryptocurrency platforms. The DOJ, CFTC, and Securities and Exchange Commission (SEC) have all brought legal action against various cryptocurrency exchanges.
Coinbase and Binance are prominent examples. In late 2023, Binance, the leading cryptocurrency exchange, settled with the DOJ and CFTC for a staggering $4 billion. Additionally, Binance’s former CEO, Changpeng Zhao, admitted to violating money laundering laws.
Last December, KuCoin agreed to pay a fine of $22 million to close the lawsuit with the New York state government under accusations of disguised securities listing and operating without a license.
KuCoin Resumes Operations In India
Despite increased regulatory scrutiny in the US, KuCoin has achieved certain progress in another jurisdiction. Earlier this month, the exchange reached an initial agreement with India’s Financial Intelligence Unit (FIU) to return to the Indian market.
KuCoin and Binance, both previously banned alongside seven other exchanges, are the first foreign entities to be allowed back into India. Also named to the warning list and blocked in the country; unfortunately, OKX could not overcome the legal challenges in India.
As reported, KuCoin paid a $41,000 penalty and has started operating again. Binance has not yet been able to resume operations as it awaits a decision on the fine, which is expected to be announced after the hearing with the FIU.
According to KuCoin, the exchange’s recent approval by India’s anti-money laundering unit (FIU) has shown its commitment to regulatory compliance.
Following this agreement with the Indian Ministry of Finance, KuCoin said it would focus on user asset safety, a transparent cryptocurrency environment, and improved legal standards within the blockchain ecosystem.
