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Statement from KuCoin CEO

KuCoin CEO Johnny Lyu recently addressed the US criminal charges against the exchange, emphasizing that the platform’s operational stability remains unaffected. In a social media post, Lyu reassured users that their funds are secure and that the team will provide regular updates on the situation. This declaration comes in response to the US Department of Justice’s decision to levy criminal charges against KuCoin for violating anti-money laundering laws.

The statement made by Lyu on social media echoed the sentiment that user assets are safe and will continue to be safeguarded. KuCoin also released an official statement addressing the allegations, clarifying that their legal team is actively investigating the matter and reiterating the safety of user funds.

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Overview of Criminal Charges

The US Attorney’s Office for the Southern District of New York revealed that KuCoin, along with its founders Chun Gan (Michael) and Ke Tang (Eric), are facing criminal charges for operating without proper legal authorization and failing to comply with anti-money laundering regulations. The indictment accuses the exchange and its founders of circumventing the Bank Secrecy Act and running an unlicensed money transmitting business.

US Attorney Damian Williams, leading the case, detailed the charges, alleging that KuCoin and its founders evaded US regulatory requirements despite having a substantial American user base. The indictment cited the exchange’s failure to implement essential anti-money laundering policies, resulting in the transfer of over $9 billion in suspicious and illicit funds through the platform.

Findings on Crypto Commodities

In a notable mention, the indictment highlighted KuCoin’s violation of the Commodity Exchange Act by not registering with the Commodity Futures Trading Commission (CFTC) while allowing users to trade commodities on its platform. The filing specifically identified Bitcoin as a commodity under the CEA, with mention of Ethereum in the context of spot trading activity.

Furthermore, DeFi Education Fund board member Jake Chervinsky noted that the CFTC complaint against KuCoin designates Bitcoin, Ethereum, and Litecoin as commodities, potentially challenging the Securities and Exchange Commission’s approach to digital asset investigation. This development signals a shift in regulatory jurisdiction within the crypto space.

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