On KuCoin's exchange, cryptocurrency holdings dropped across a number of digital assets while the business dealt with a regulatory investigation involving its founders.
On KuCoin's exchange, cryptocurrency holdings dropped across a number of digital assets while the business dealt with a regulatory investigation involving its founders.
The platform's Bitcoin (BTC) holdings decreased by more than 25% in the wake of a lawsuit filed by the U.S. Department of Justice (DOJ) claiming bank activities and money laundering crimes, according to KuCoin's most recent asset reserve certificate.
According to KuCoin, the BTC held by its users dropped from over 16,000 in February to just over 12,000. In less than a month, the decline equates to a difference of almost 4,000 BTC. Over 31,000 Ethereum (ETH) were removed from the network by users, bringing its reserves down to approximately 113,000 ETH at the end of the previous month.
Stablecoin balances for Circle's USD Coin (USDC) and Tether (USDT) decreased by 33% and 21%, respectively, according to KuCoin. Between February 29 and March 31, users took out $265 million in USDT and $19 million in USDC.
DOJ lawsuit accusing KuCoin of money laundering
The U.S. Justice Department filed a lawsuit against KuCoin on March 26 due to breaches committed by both the exchange and its creators. The website was charged with violating the Bank Secrecy Act and making illegal money transactions that were connected to money laundering.
Chun Gan and Ke Tang, the co-founders, are also accused of disguising American users on the cryptocurrency exchange in order to get around KYC and anti-money laundering (AML) regulations. Attorney Damian Williams said that by enabling $5 billion in dubious payments and breaking established regulatory standards, the business violated local banking laws.
Within a day of the news breaking, users quickly removed over $350 million off the trading platform, but firm representatives reassured clients that their assets would be secure, as crypto.news reported on March 27.
According to DefiLlama, the ninth-largest cryptocurrency exchange in the world by reserves was also hit with charges by the U.S. Commodities Futures Trading Commission (CFTC). Commissioner Caroline Pham of the CFTC, however, hinted that her organization could have gone too far in its enforcement action.
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