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.

Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex were sent showcause notices by the Indian government.#Apple has removed Binance, KuCoin and other offshore cryptocurrency exchanges from its India app store days after nine entities were sent compliance show cause notices by the nation's government.OKX, another prominent offshore cryptocurrency exchange, has also been removed from the Apple India app store even though it wasn’t sent a show cause notice. Binance, #KuCoin , Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex are the nine exchanges that were sent notices.On Dec. 28, India’s Financial Intelligence Unit (FIU) which falls under the nation’s Finance Ministry, issued compliance show cause notices under its Prevention of Money Laundering Act (PMLA). The government also took the first steps to block the URLs of "said entities that are operating illegally without complying.However, that process requires extensive paperwork and is still ongoing, which is why the URLs are still working in India for these exchanges, a person familiar with the matter told CoinDesk. The Indian government may also want to wait for the entities to respond to the notices before taking further action, the person said.The apps continue to show on Google PlayStore.Existing app users will not be affected, and Binance will continue to work with regulators to resolve the situation, the company said following the publication of this article."The ongoing situation is not unique to #Binance and we remain committed to complying with local regulations and maintaining dialogue with regulators worldwide to ensure the continued availability of our services," a post on Binance South Asia's X (formerly Twitter) account said.Apple India and the FIU could not be reached immediately for comment.#etf #India 🙏🏿Show Your Support🔥🙏🏿If you found this helpful, consider to tipping me through the Binance Tipping feature. Your generosity will help me to continue to provide high quality contents. 🙏🏿

The U.S. Attorney’s Office for the Southern District of New York, together with Homeland Security Investigations (HSI), revealed charges against global cryptocurrency exchange KuCoin and two of its founders, Chun Gan (also known as “Michael”) and Ke Tang (also known as “Eric”).
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These charges, announced in a press release on March 26, 2027, involve serious violations of U.S. financial regulations. The accusations include operating a money-transmitting business without a license and failing to comply with the Bank Secrecy Act. Specifically, the indictment alleges that KuCoin did not maintain an adequate anti-money laundering (AML) program.

U.S. Attorney Highlights KuCoin’s Alleged Wrongdoing
U.S. Attorney Damian Williams emphasized KuCoin and its founders’ deliberate actions to hide the participation of U.S. users on their platform. By leveraging this significant customer base, KuCoin reportedly expanded into one of the world’s largest cryptocurrency exchanges.
The absence of fundamental anti-money laundering (AML) policies, as stated in the press release, allegedly allowed KuCoin to become a conduit for illegal money laundering activities, involving more than $9 billion of suspicious and criminal funds.

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The press release provided insights into KuCoin’s operational framework, revealing purported disregard for U.S. legal obligations by Gan, Tang, and KuCoin. Allegations include the absence of a robust Know Your Customer (KYC) program until July 2023, failure to file suspicious activity reports, and failure to register with relevant U.S. regulatory bodies. These purported actions are said to demonstrate KuCoin’s systematic avoidance of U.S. anti-money laundering and customer identification protocols.
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KuCoin Accused of Masking U.S. Customer Base
The press release highlighted KuCoin’s active efforts to conceal its U.S. customer base, which included measures to prevent users from disclosing their location when creating accounts. Additionally, KuCoin allegedly misled investors about the geographical distribution of its customer base. These actions, deemed deceitful, were reportedly crucial to KuCoin’s strategy in attracting users seeking anonymity.

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The indictment against KuCoin, its founders, and associated entities represents a significant development in the regulation of cryptocurrency exchanges operating within and targeting the U.S. market. The charges carry substantial penalties, with individuals facing up to five years in prison for each count of conspiring to operate an unlicensed money-transmitting business and violating the Bank Secrecy Act. The entities collectively known as KuCoin face potentially harsher penalties across multiple charges.
U.S. Attorney Condemns KuCoin’s Alleged Wrongdoings
Concealment of U.S. User Base: U.S. Attorney Damian Williams emphasized KuCoin’s alleged deliberate attempts to hide the presence of significant numbers of U.S. users on its platform. KuCoin purportedly capitalized on its sizable U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, with billions of dollars in daily trades and trillions of dollars in annual trade volume. However, Williams stressed that financial institutions operating in the U.S. must adhere to U.S. law to combat crime and corruption.

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Failure to Implement AML Policies: According to Williams, KuCoin allegedly chose not to implement even basic anti-money laundering (AML) policies. This failure purportedly allowed KuCoin to operate in the shadows of financial markets and be utilized as a haven for illicit money laundering. The indictment claims that KuCoin received over $5 billion and sent over $4 billion of suspicious and criminal funds.
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Clear Message to Crypto Exchanges: Williams stated that crypto exchanges like KuCoin cannot simultaneously benefit from serving U.S. customers while disregarding U.S. law. The indictment serves as a clear message to other crypto exchanges that if they intend to serve U.S. customers, they must comply with U.S. law without exception.
On-Chain Analysis by CryptoQuant CEO: In contrast, Ki Young Ju, founder and CEO of South Korea-based crypto analytics startup CryptoQuant, offered a different perspective, stating that “on-chain wise,” KuCoin is doing okay.
On-chain wise, @kucoincom is fine.$BTC and $ETH withdrawals surged, driven mainly by retail users, with a small impact on the overall reserve.They appear to not commingle customers' funds and have sufficient reserves to process user withdrawals. pic.twitter.com/p4bJJpwnFJ— Ki Young Ju (@ki_young_ju) March 27, 2024

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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.

#KuCoin #Altcoin #Cryptocurrency #CryptoNews #KCS

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.
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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