United States of America: Announced public lawsuit against KuCoin and Founders for Allegedly Violating Bank Secrecy Act and Unlicensed Money Transmission Offences

On 26 March 2024, the US Department of Justice announced a public lawsuit against the global cryptocurrency exchange platform KuCoin and two of its founders for operating an unlicensed money-transmitting business and violating the Bank Secrecy Act by failing to maintain an adequate anti-money laundering (AML) program, failing to maintain reasonable procedures for verifying the identity of customers through know-your-customer (KYC) processes, and failing to report any suspicious activity reports. Specifically, KuCoin allegedly had no KYC process in place until July 2023, after which the implemented KYC process only applied to new customers. The lawsuit further alleges that KuCoin actively and knowingly sought to conceal the fact that substantial numbers of US users were trading on its platform, allowing it to operate outside the applicable law for US financial markets and being used as a haven for illicit money laundering, with KuCoin receiving over USD 5 billion and sending over USD 4 billion of suspicious and criminal funds. Finally, the lawsuit states that KuCoin failed to register as a futures commission merchant and a money-transmitting business.