Key Points
- KuCoin’s cryptocurrency balances, including Bitcoin (BTC) and Ethereum (ETH), have significantly decreased amid a regulatory probe.
- The U.S. Department of Justice (DOJ) has filed a lawsuit against KuCoin, alleging money laundering and bank acts violations.
KuCoin, a cryptocurrency exchange, has experienced a significant decrease in various digital assets. This comes as the platform is under a regulatory investigation involving its founders.
Significant Drop in Assets
The latest asset reserve certificate from KuCoin indicates a substantial reduction in its Bitcoin stockpile. Following a lawsuit from the U.S. Department of Justice (DOJ) accusing the exchange of bank acts and money laundering violations, the platform’s Bitcoin reserves fell by over 25%.
The Bitcoin holdings of KuCoin users dropped from over 16,000 in February to just above 12,000, a difference of about 4,000 BTC within a month. In addition, more than 31,000 Ethereum were withdrawn from the platform, resulting in a 21% reduction and leaving the reserves at nearly 113,000 ETH by the end of the month.
The balances of stablecoins Tether (USDT) and Circle’s USD Coin (USDC) on KuCoin also declined by 21% and 33% respectively. Users withdrew $265 million USDT and $19 million USDC between February 29 and March 31.
DOJ Lawsuit Against KuCoin
On March 26, the U.S. Justice Department filed a lawsuit against KuCoin. The exchange and its founders were accused of violating the Bank Secrecy Act and engaging in unlawful money transfers linked to alleged money laundering activities.
KuCoin co-founders Chun Gan and Ke Tang were also accused of violating anti-money laundering (AML) and KYC rules by concealing U.S. users on the crypto exchange. The exchange allegedly facilitated $5 billion in suspicious funds and failed to comply with established regulatory policies.
Following the news, users quickly withdrew over $350 million from the trading platform within 24 hours. However, company officials reassured customers about the safety of their assets.
The U.S. Commodity Futures Trading Commission (CFTC) also filed charges against KuCoin, the world’s ninth-largest crypto exchange by reserves. However, CFTC Commissioner Caroline Pham suggested that the agency may have overstepped its bounds in its enforcement action.
