KuCoin, one of the largest crypto exchanges in the world, has formed an alliance with the top law firm A&O Shearman as it faces mounting legal challenges from US authorities.
This partnership comes after the Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) brought debilitating lawsuits against the crypto exchange for various financial crimes.
KuCoin’s CEO, Johnny Lyu, said the company would cooperate with regulators and lawmakers in the current lawsuits. Lyu showed that KuCoin has been in talks with the US DoJ and CFTC multiple times to resolve the disputes.
He said,
“We are optimistic about getting to a solution that is palatable to all, and would like to highlight that in the past two years, KuCoin has restructured its organisation and upgraded its system and invested heavily in security and compliance.”
The current legal battle arises from KuCoin being accused of deliberately violating US anti-money laundering laws and operating an unregistered money-transmitting business. The indictment, unsealed by the US Attorney’s Office for the Southern District of New York, accuses KuCoin and its founders of plotting to violate the Bank Secrecy Act by failing to implement an AML program and identifying its customers.
US Attorney Damian Williams condemned KuCoin’s actions, saying that the crypto exchange knowingly enabled illegal financial activities, including money laundering, by failing to implement even basic AML policies. According to the indictment, KuCoin had a huge customer base in the US despite the exchange’s failure to adhere to US requirements and engaged in billions of dollars in transactions.
The indictment further pointed out that KuCoin actively concealed the existence of US customers and marketed the services as KYC-free, contributing to its fast growth and success. Both founders, Chun Gan and Ke Tang, face an indictment for conspiring to violate the Bank Secrecy Act and operating an unlicensed money-transmitting business, each charge carrying a maximum sentence of five years in prison.
KuCoin and associated entities face numerous charges, including violations of the Bank Secrecy Act and operating an unlicensed money-transmitting business, all of which carry sentences of up to 10 years in prison.
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