Cryptocurrency exchange KuCoin is facing a regulatory investigation by the U.S. Department of Justice (DOJ) over legal issues involving its founder, which has led to a drop in balances of multiple digital assets on the platform.
According to KuCoin’s latest proof of reserves, the platform’s Bitcoin (BTC) reserves have dropped by more than 25% following a lawsuit filed by the U.S. Department of Justice alleging banking practices and money laundering violations.
KuCoin reported that the number of BTC held by its users dropped from over 16,000 in February to just over 12,000, which represents a decrease of approximately 4,000 BTC in one month.
Meanwhile, users withdrew more than 31,000 Ethereum (ETH) from the platform, causing its reserves to drop to nearly 113,000 ETH at the end of last month, a 21% drop.
KuCoin also recorded a drop in its stablecoin balances, with Tether (USDT) and Circle’s USD Coin (USDC) falling by 21% and 33% respectively, with users withdrawing $265 million in USDT and $19 million in USDC between February 29 and March 31.
US Department of Justice launches money laundering case against KuCoin
On March 26, the U.S. Department of Justice filed a lawsuit against KuCoin, accusing the exchange and its founder of violating the Bank Secrecy Act and engaging in illegal fund transfers related to money laundering activities.
Co-founders Chun Gan and Ke Tang are also accused of circumventing anti-money laundering (AML) and know-your-customer (KYC) rules by allegedly hiding U.S. users on the cryptocurrency exchange. Prosecutor Damian Williams said the company ignored local financial laws and failed to comply with established regulatory policies by facilitating $5 billion in suspicious funds.
As the media reported on March 27, users quickly withdrew more than $350 million from the trading venue within 24 hours after the news broke, but company officials assured customers that their assets were safe.
The U.S. Commodity Futures Trading Commission (CFTC) has also filed charges against KuCoin, the world’s ninth-largest cryptocurrency exchange by reserves, according to DefiLlama. However, CFTC Commissioner Caroline Pham said her agency may have been too aggressive in its enforcement actions.
According to DefiLlama, the U.S. Commodity Futures Trading Commission (CFTC) has also filed charges against KuCoin, the world's ninth-largest cryptocurrency exchange by reserves. However, CFTC Commissioner Caroline Pham raised the view that her agency may have overextended its authority or taken too aggressive measures in its enforcement actions. This suggests that although the CFTC has taken enforcement action against KuCoin, there may be disagreements within the CFTC regarding the appropriateness and impact of this action, which requires further review and evaluation. #比特币余额 #交易所被起诉