The Attorney General of the Southern District of New York filed criminal charges against the crypto exchange KuCoin last night, March 26. The exchange's administrators, Chun Gan and Ke Tang, have also been indicted. Authorities accuse the founders of, among other things, operating an unlicensed money transfer business and violating banking secrecy.

They are also said to have taken insufficient measures against money laundering and terrorist financing. US authorities are particularly concerned about easy access to the platform by US citizens.

"As described in today's indictment, KuCoin and its founders intentionally attempted to conceal the fact that a significant number of U.S. users were trading on the KuCoin platform," prosecutor Damian Williams said in a statement. The case calls to mind the ongoing case against Binance.

Special Agent Darren McCormack even speaks of a "multi-billion dollar crime." They had served 30 million customers without "complying with necessary laws."

In a statement on Platform X, KuCoin CEO Johnny Lyu said, "The challenge we face is not specific to KuCoin, but more typical of the growth and regulatory issues of emerging industries. In the early stages of development, there are often gaps in regulation, but as the industry grows, we move toward and embrace compliance and standardization."

KuCoin is one of the largest Bitcoin exchanges in the world with 30 million users. According to data from Coingecko, the exchange has a trading volume of US$1.8 billion per day.

The world's fourth largest exchange: KuCoin. Data: Coingecko

Because the company also operates in the US, it should have registered as a so-called "money transmitting business" with the US authority FinCEN. According to the prosecution, however, this never happened. Nor was there ever an appropriate KYC program. Moreover, the founders actively tried to hide the existence of U.S. customers - for example, from an investor. The prosecution is talking about money laundering totaling four to five billion US dollars.

The implications for the crypto market are not yet fully understood. KuCoin is a group with headquarters in the Cayman Islands, Seychelles and Singapore. As in the case of Binance, KuCoin could eventually stop serving U.S. customers but still continue to run the exchange.

At the time of writing, the effect on the crypto market is manageable. Bitcoin is down only slightly at -1.5 percent.