The CFTC and SEC are at it again, this time focusing on KuCoin. Caroline Pham from the CFTC hinted that their actions might upset the SEC.
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Despite expectations of regulatory harmony, tensions are evident. The CFTC, overseeing commodity derivatives, hit KuCoin with numerous charges under the Commodity Exchange Act (CEA) and CFTC regulations, alongside criminal charges from the U.S. Justice Department. All this unfolded on March 26, making it a tough day for KuCoin.

Regulatory Dispute: CFTC vs. SEC
Caroline Pham of the CFTC didn’t hold back, suggesting that the CFTC’s recent actions might blur the line between securities and non-securities. She emphasized that trading derivatives doesn’t equate to owning underlying shares, a crucial distinction that delineates the CFTC’s jurisdiction from the SEC’s.
Beyond a regulatory spat, this conflict delves into the core understanding of financial instruments and activities. Historically, the U.S. maintained a clear division between securities and commodities. However, the emergence of cryptocurrencies has complicated matters. Ethereum, for instance, stands at the center of this debate: Is it a commodity or a security? While the CFTC leans towards the former, if the SEC determines it’s the latter, the crypto market, particularly spot Ether exchange-traded fund applications, could face significant repercussions.

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KuCoin Faces Regulatory Storm
Business as Usual: Despite facing regulatory allegations, KuCoin maintained a bold stance, reassuring users that their assets remained secure. Their audacity was evident when they tweeted about discovering “100x CryptoGems” on their platform amid the legal turmoil, demonstrating a remarkable level of composure.
Also Read:   LUNC Price Soars 400%; Analyst Forecasts 270% Further Upside
Serious Charges: However, the gravity of the situation cannot be overlooked. KuCoin’s co-founders, Chun Gan and Ke Tang, are under fire from the U.S. SDNY, accused of operating an unlicensed money-transmitting business and evading anti-money laundering laws. Adding to the complexity is KuCoin’s alleged no-KYC (Know Your Customer) policy, purportedly pivotal to its growth, facilitating over $9 billion in suspicious transactions. It appears that KuCoin was indifferent to regulatory compliance.

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Regulatory Oversight: From roughly mid-2019 to mid-2023, KuCoin allegedly conducted transactions that should have triggered oversight from the CFTC. However, according to charges, they neglected IP verification to block U.S. users. This negligence, or possibly deliberate oversight, has drawn the ire of U.S. regulators, placing KuCoin under intense scrutiny.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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#SEC  #KuCoin  #CFTC  #Altcoin  #Cryptocurrency $BTC $ETH $SOL

💥The article dealing with this topic caused a lot of embarrassment in the entire Binance community, so we decided to update it with more detailed information.
The Indian financial intelligence unit is seeking to block the URLs of many significant global #cryptocurrency exchanges, including #Binance , #KuCoin , Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex. This move is motivated by concerns over illegal activities and violations of anti-money laundering laws.
Nine International Virtual Currency Providers Under Scrutiny
The Indian financial intelligence unit has issued a notice identifying these nine foreign providers of virtual digital asset services as participants in illegal activities and violations of anti-money laundering regulations. The unit has requested the Ministry of Electronics and Information Technology to block the URLs of these companies, which should prevent access to their websites in India.
 Insufficient Regulation and Registration of Foreign Entities
The document indicates that a number of offshore entities serving a significant number of Indian users are not properly registered and do not fall under the regulatory framework against money laundering (AML) and counter-terrorism financing (CFT). These companies should be registered with the Financial Intelligence Unit IND and comply with the relevant regulations, including the Prevention of Money Laundering Act (PMLA) of 2002, which contains a set of obligations designed to prevent money laundering.
 

FIU's compliance Show Cause Notices Alert. Source: PIB Government of India
 India as a Key Player in Global Cryptocurrency Adoption
In the Chainalysis 2022 global cryptocurrency adoption index, India was rated as one of the top countries and became the second-largest market by gross estimated transaction volume globally, just after the United States. This rapid growth in cryptocurrency adoption in the country has led to increased scrutiny by Indian regulatory authorities.
 Upcoming Regulatory Framework for Cryptocurrencies
India is working on creating a comprehensive regulatory framework for cryptocurrencies, planned to be published in 2024. This framework is likely to include advanced Know Your Customer (KYC) rules, real-time proof of reserves audits, and a unified tax policy. It is expected to propose that cryptocurrency exchanges be regulated similarly to authorized dealers in accordance with the guidelines of the Reserve Bank of India.
 #crypto2024SpaceCatch #crypto2023
 Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“

Letitia James, the attorney general for the state of New York, declared that she has filed a lawsuit against the unlicensed #cryptocurrency exchange #KuCoin after being able to buy and sell tokens there. Her office released a statement saying that "this case is one of the first times a regulator is arguing in court that ETH, one of the largest cryptocurrencies available, is a security.

KuCoin, which has its headquarters in the Seychelles, is accused of breaking the law when it "sold, offered to sell, purchased and offered to purchase cryptocurrencies that are commodities and securities" to residents of New York without first registering with the attorney general's office, according to the complaint, which was filed on March 9 in the Supreme Court of the State of New York County.

Also, KuCoin is charged with not having registered as a securities broker or dealer when it issued and sold its KuCoin Earn product, which the complaint refers to as a security. Additionally, it claims KuCoin misrepresented itself as an exchange because it was not registered to perform that role.

According to the lawsuit, the state's Martin Act defines ETH, LUNA, and UST as commodities, and KuCoin applied to register as a commodities dealer. According to the lawsuit, "ETH, LUNA, UST, and KuCoin Earn are each securities under Waldstein" (a standard set by the Albany County branch of the New York Supreme Court in 1936) and "under the Howey test," respectively. Furthermore:

“The Howey test is applicable to the tokens as illustrated by recent federal authority.”

To prove its point, the lawsuit directly refers to the SEC v. LBRY case. It urges the court to order an accounting of all New Yorkers who have used the exchange and disgorgement of cash illegally received from New Yorkers, as well as a permanent injunction against KuCoin "selling and buying stocks and commodities to and from New Yorkers".

James has taken this as his "eighth measure to rein in mysterious cryptocurrency services," as she claimed.