Two Kucoin Founders accused of violating anti-laundering laws etc.

[BABY SHOES]

The latest news from the Kucoin exchange is that founders Chun Gan and Ke Tang have been accused by the US Attorney's Office of violating anti-money laundering and bank secrecy laws.

I read in the Coindesk article that Kucoin also received $3.2 million from Tornado Cash, as well as suspected criminal fund activity from various nefarious groups.

criminal activities, including proceeds from sanctions violations, darknet markets, and malware, ransomware, and fraud schemes," the indictment said.

With concerns now, will the Kucoin exchange collapse?
In a statement on X kucoin they said the platform continues to operate properly and even user assets remain safe, but I'm not sure as this would be a concern for its customers.

Source:
[1] https://www.coindesk.com/business/2024/03/26/crypto-exchange-kucoin-violated-anti-money-laundering-laws-us-charges/
[2] https://www.justice.gov/usao-sdny/pr/prominent-global-cryptocurrency-exchange-kucoin-and-two-its-founders-criminally
[3] https://twitter.com/kucoincom/status/1772649807972315170

[1714505942]

1714505942

[1714505942]

1714505942

[1714505942]

1714505942

[1714505942]

1714505942

[1714505942]

1714505942

[AB de Royse777]

With concerns now, will the Kucoin exchange collapse?

Kucoin handled their past issues very well, hopefully they will handle this one wisely too.

[Dr.Bitcoin_Strange]

With concerns now, will the Kucoin exchange collapse?
In a statement on X kucoin they said the platform continues to operate properly and even user assets remain safe, but I'm not sure as this would be a concern for its customers.

I remember that last year, Binance also had serious issues with the US government, for which they pleaded guilty for floating anti-money laundering laws too. but yet it did not lead to the collapse of the exchange, and that's why I think that their current issues with Kucoin will not also be their downfall unless they fail to comply with the government.

I want to believe that by now, every crypto enthusiast is aware of how unsafe it is to store their assets on a centralized exchange. The past incidents of failed exchanges and hack cases are enough to learn from. Despitethe fact that Kucoin may not still collapse in this case, customers need to play smart. Just my opinion, though. 

[mindrust]

With concerns now, will the Kucoin exchange collapse?

Impossible to know... Kucoin has been decent but I lost interest in their platform the moment they decided to enforce KYC on everybody. I know that every centralized exchange does it now but since Binance already has my documents, I don't want to do KYC with every exchange I have an account on.

I withdrew all my coins from binance few weeks ago too and I am quite relieved about it. I was hearing stories about people getting selectively scammed by binance and It was making me nervous. I saw people getting their accounts locked out of nowhere and these people already did KYC on binance. That's some scary shit.

Better be safe than sorry. Don't keep any meaningful coins on any exchange. I hear some pretty bad shit about a decentralized wallet/exchange too. I guess the only time you'd want to use an exchange is when you are cashing out to FIAT.

Deposit > Convert to FIAT > Withdraw all

Everything else should stay in your cold wallet.

[$crypto$]

I was expecting the same thing with CZ where they would resign and be replaced by someone else, but I guess it would be a different scenario.

I saw some people complaining about delayed withdrawals from this X account stating the withdrawal process was delayed by 30 although I don't know if this worked or not.

But there have been a lot of large withdrawals like that, this should be watched out for before a worse crash happens...
There are some people think Kucoin is still safe we don't know in the future this will be a panic.

https://twitter.com/0x_Lens/status/1772669650003796272

[Oshosondy]

With concerns now, will the Kucoin exchange collapse?
In a statement on X kucoin they said the platform continues to operate properly and even user assets remain safe, but I'm not sure as this would be a concern for its customers.

If Binance survived it, I believe Kucoin is not that small not to survive it. But I do not care about surviving it or not, the best that I can tell people to do is to move their money out of Kucoin and trade on another exchange until the matter has been solved. But I believe this can not collapse Kucoin from the result of my analyses.

[Husires]

With concerns now, will the Kucoin exchange collapse?

The arrest of two founders and indictment of money laundering is a separate event and may not lead to harm to Kucoin’s investments, but accusing the platform itself of supporting money laundering may lead to its collapse.

The Ministry of Justice statement is as follows:

The US Department of Justice said in the indictment that KuCoin and its founders Chun Gan and Ke Tang ran KuCoin as a money transfer business with more than 30 million customers, but did not implement a know-your-customer (KYC) or anti-money laundering program until 2023 — and even then, it did not implement “Know Your Customer” program for existing customers. Neither Gan nor Tang have been arrested, the Justice Department said in a press release.

While it seems that the charges are related to non-compliance with the Know Your Customer (KYC) program or the anti-money laundering program until the year 2023, and even after its implementation, there was no seriousness in this, so I expect that if cooperation with the regulatory authorities is done and all KYC and exchange data provided, a judicial settlement may be reached.

[BABY SHOES]

Kucoin handled their past issues very well, hopefully they will handle this one wisely too.

Hopefully so, but Kucoin trusts the legal process.

Impossible to know... Kucoin has been decent but I lost interest in their platform the moment they decided to enforce KYC on everybody. I know that every centralized exchange does it now but since Binance already has my documents, I don't want to do KYC with every exchange I have an account on.

If I'm not mistaken since July 2023 Kucoin has implemented KYC for all its users, because of the pressure for regulation.
The only exchange I use that is not KYC is still MEXC.
With Binance it is more than enough because I also have the same documents on Binance if you don't do this then you can't trade.

While it seems that the charges are related to non-compliance with the Know Your Customer (KYC) program or the anti-money laundering program until the year 2023, and even after its implementation, there was no seriousness in this, so I expect that if cooperation with the regulatory authorities is done and all KYC and exchange data provided, a judicial settlement may be reached.

I don't know if Kucoin Global is based in the US? If this is a separate offense then it will be almost the same as Binance, we know every exchange must have a special one for US citizens, then this action will refer to it, but until now it is said that Kucoin is still fine.

[Kavelj22]

Binance also faced this problem and is now operating bigger than before.
The Binance platform was facing similar accusations last November 2023, which ended with the imposition of a fine exceeding four billion dollars (the largest fine ever paid in Control) and its owner being puishedd by resigning from the position of CEO and not participating in management for three years, paying a fine of fifty million dollars, and submitting reports for thirty years. The charges are similar. The Kucoin platform has a huge number of assets for a large number of users, and the authorities will not take steps that harm the interests of users, as one of the accusations is that the platform hides a large number of American users, was the reason for it becoming a huge company in the crypto market.

At the present time, it does not seem that there is a state of panic in the market based on the price movement, but there are definitely influential effects. You should also withdraw any assets from the platforme and follow the latest of this news carefully before continuing use. Binance platform also announced the news without mentioning any position.

[NotATether]

With concerns now, will the Kucoin exchange collapse?

Kucoin handled their past issues very well, hopefully they will handle this one wisely too.

Umm they have literally been charged with unlicensed money transmitting which the USA takes very seriously, so at the very least they are going to be kicked out of the USA if they haven't been already, but it's far more likely that criminal proceedings are opened against them just like they did to BurtW not very long ago.

[crwth]

Since it is from the time when they are not doing the KYC, it may be settled easier. I imagine that it's something that they have expected. I see KuCoin as one of the exchanges that could stay longer and be one of the top exchanges still. I know that they have been handling this kind of stuff very well. It's better to be safe than sorry if you are a user of KuCoin. Better transfer your portfolio there or something.

[Zaguru12]

I don't know if Kucoin Global is based in the US? If this is a separate offense then it will be almost the same as Binance, we know every exchange must have a special one for US citizens, then this action will refer to it, but until now it is said that Kucoin is still fine.

It’s just like binance with maybe subsidiary office in US but the headquarter is actually in Mahe, Seychelles. So with this issue definitely their ban will be just placed in US and not affect the entire global exchange. Yesterday many people panicked and started withdrawing their funds but an official statement on X accounts stated that the funds were safe and no need to panic but any one using it might be an idiot (sorry to use that word) not to panic and withdraw there funds

[rat03gopoh]

I don't know if Kucoin Global is based in the US? If this is a separate offense then it will be almost the same as Binance, we know every exchange must have a special one for US citizens, then this action will refer to it, but until now it is said that Kucoin is still fine.

As far as I remember they didn't serve US users even before implementing mandatory KYC on users. However, the object of this accusation is especially before KYC was implemented, where US users were still potentially free to register and did business under the withdrawal limits permitted by level 0 users.

[BABY SHOES]

I don't know if Kucoin Global is based in the US? If this is a separate offense then it will be almost the same as Binance, we know every exchange must have a special one for US citizens, then this action will refer to it, but until now it is said that Kucoin is still fine.

It’s just like binance with maybe subsidiary office in US but the headquarter is actually in Mahe, Seychelles. So with this issue definitely their ban will be just placed in US and not affect the entire global exchange. Yesterday many people panicked and started withdrawing their funds but an official statement on X accounts stated that the funds were safe and no need to panic but any one using it might be an idiot (sorry to use that word) not to panic and withdraw there funds

Like that, this does not affect Kucoin globally but the problem may be that US customers who committed criminal acts before KYC was implemented before then the prosecutor's office prosecuted all of this to the founder.

Yes, many are panicking after this news incident, more FUD news about immediately withdrawing funds from Kucoin before it's too late but I still believe Kucoin will continue to operate safely.

If it is better to withdraw immediately and keep it in a personal wallet it will be safer than on the exchange.

[NotATether]

Like that, this does not affect Kucoin globally but the problem may be that US customers who committed criminal acts before KYC was implemented before then the prosecutor's office prosecuted all of this to the founder.

Yes, many are panicking after this news incident, more FUD news about immediately withdrawing funds from Kucoin before it's too late but I still believe Kucoin will continue to operate safely.

If it is better to withdraw immediately and keep it in a personal wallet it will be safer than on the exchange.

KuCoin operating safely?

Come on man, I'm not trying to be biased here but don't you remember what happened to FTX?

"Funds are SAFU" and then they went under. Actually they could've maintained that aura right up until their insolvency if their idiot founder did not start rambling about it on Twitter.

[albon]

With concerns now, will the Kucoin exchange collapse?
In a statement on X kucoin they said the platform continues to operate properly and even user assets remain safe, but I'm not sure as this would be a concern for its customers.

I do not think KuCoin can collapse so easily after these accusations from the DOJ and CFTC. This matter can be settled since Kucoin is considered one of the top exchanges in the market, so they have sufficient reserves of funds to move forward and process users’ withdrawals. They announced that they had appointed lawyers to address the alleged charges, and I know that the platform has faced and resolved many previous problems. Binance was the closest example; despite the rumors that spread at the time that Binance would end after its war with the SEC, it has now been regulated and continues its operations uninterrupted.

It is worth noting that I saw one of the articles that indicated a net outflow of nearly $2 billion of funds from Kucoin after massive withdrawal operations from exchange clients due to the spread of FUD ^[1]. Additionally, amidst the ongoing bad news, the Kucoin platform is preparing an airdrop worth $10 million in KCS and BTC rewards for its clients ^[2]. Perhaps this indicates they want to calm the situation and make users stop withdrawing their assets from the platform.

[Husires]

While it seems that the charges are related to non-compliance with the Know Your Customer (KYC) program or the anti-money laundering program until the year 2023, and even after its implementation, there was no seriousness in this, so I expect that if cooperation with the regulatory authorities is done and all KYC and exchange data provided, a judicial settlement may be reached.

I don't know if Kucoin Global is based in the US? If this is a separate offense then it will be almost the same as Binance, we know every exchange must have a special one for US citizens, then this action will refer to it, but until now it is said that Kucoin is still fine.

No, but they have a digital derivative assets license and the companies are Mek Global Limited, PhoenixFin PTE Ltd., Flashdot Limited, and Peken Global Limited, which puts them under the jurisdiction of the CFTC regulations, which has brought legal charges against them https://www.cftc.gov/PressRoom/PressReleases/8884-24

The complaint charges KuCoin illegally dealt in off-exchange commodity futures transactions and leveraged, margined, or financed retail commodity transactions; solicited and accepted orders for commodity futures, swaps, and leveraged, margined, or financed retail commodity transactions without registering with the CFTC as a futures commission merchant (FCM); failed to diligently supervise its FCM activities; operated a facility for the trading or processing of swaps without registering with the CFTC as a swap execution facility (SEF) or designated contract market (DCM); and failed to implement an effective customer identification program (CIP). 

Such lawsuits could end in settlements that result in huge sums being paid to the CFTC, penalties for both Chun Gan and Ke Tang, and a ban on providing service to anyone in the United States.

Kucoin will be fine if the settlement amount is acceptable and the CFTC does not find additional evidence.

[BABY SHOES]

Like that, this does not affect Kucoin globally but the problem may be that US customers who committed criminal acts before KYC was implemented before then the prosecutor's office prosecuted all of this to the founder.

Yes, many are panicking after this news incident, more FUD news about immediately withdrawing funds from Kucoin before it's too late but I still believe Kucoin will continue to operate safely.

If it is better to withdraw immediately and keep it in a personal wallet it will be safer than on the exchange.

KuCoin operating safely?

Come on man, I'm not trying to be biased here but don't you remember what happened to FTX?

"Funds are SAFU" and then they went under. Actually they could've maintained that aura right up until their insolvency if their idiot founder did not start rambling about it on Twitter.

That's how it is... I look at it now but don't know about the future. Lol

FTX case is worse, Kucoin next? I don't think it's happening anytime soon, but luckily I don't have a balance there.

It's funny that for this accusation case the CEO of Kucoin held an airdrop of $10,000,000 to the community in the form of KCS and BTC this will be given to those who withdraw for a long time at that time, hmm like they are fishing or inviting the community to come back?

[1] https://www.kucoin.com/blog/letter-from-kucoin-ceo-10-million-airdrop-in-kcs-btc-in-thanks-to-community-support
[2] https://twitter.com/kucoincom/status/1773039000846237944

[Potato Chips]

TBH, kucoin has been lax with US users, so I'm not surprised US has come for their ass.

1. There was no geo-blocking for a good amount of time -- it probably came late.
2. Countless reddit posts of kucoin mods subtly encouraging US residents because KYC was not mandatory.

e.g.

OP: Can I kyc to protect my account. If i managed to grow a nice balance on one of my accounts i want my name attached . Is that available yet?
kucoin_moderator: US is not included on our KYC country list, however, KYC is not mandatory.

[The Sceptical Chymist]

With concerns now, will the Kucoin exchange collapse?

My first thought upon reading this was "Is there absolutely no honesty in the crypto space?".  And that isn't the first or even the 10th time that's run through my mind.  If Kucoin gets caught up in a big enough scandal, then my guess would be that yeah, they're done for.  They might have been, or even still be, a popular exchange but we've seen enough shenanigans take down exchanges before, and enough government scrutiny on crypto as of late, that they probably wouldn't be able to survive a massive hit to their reputation.

Kucoin has been decent but I lost interest in their platform the moment they decided to enforce KYC on everybody.

Did they even have to do that?  They're not based out of the US if I'm right, so I don't know which regulatory agency could put enough pressure on them such that they'd make a move that'd be sure to lose them a significant number of customers.  Ah well.