KuCoin has issued a response to a series of legal allegations brought forth by prosecutors from the United States Southern District of New York (SDNY) and the Commodity Futures Trading Commission (CFTC) on March 26.

In a statement posted on March 26, KuCoin assured users that its operations are running smoothly and emphasized the safety of user assets. The exchange reiterated its commitment to adhering to the laws and regulations of various countries while maintaining stringent compliance standards.

Despite these assurances, KuCoin Token (KCS), the native token of KuCoin, experienced a 13% decline in value over the past 24 hours, with its current trading price standing at $12.43.

Furthermore, KuCoin announced the postponement of a scheduled Ask Me Anything (AMA) session with Polkadot, citing ongoing efforts to finalize a new schedule for the event.

The U.S. Department of Justice (DOJ) has specifically accused KuCoin and its founders, Chun Gan and Ke Tang, of knowingly participating in money laundering activities, including violations of the Bank Secrecy Act and unlicensed money transmission. Additionally, they are accused of attempting to conceal the existence of U.S. customers to evade Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.

U.S. Attorney Damian Williams criticized KuCoin for allegedly flouting U.S. rules and regulations.

Deputy Special Agent in Charge for the U.S. Department of Homeland Security, Darren McCormack, underscored the significance of the indictment, characterizing KuCoin's operations as part of an alleged "criminal conspiracy on a massive scale," facilitating service to over 30 million customers without legal compliance.

According to Chinese crypto journalist and market analyst Wu Blockchain, KuCoin reportedly discussed the possibility of ceasing operations and selling the exchange in 2023 due to a criminal probe in the United States and multiple inquiries in China. Wu Blockchain also reported that personnel from various exchanges, including Binance, were informed about the potential sale of KuCoin.

On March 26, KuCoin and its founders were formally served with criminal and civil lawsuits by the U.S. government. Founders Gan and Tang, both Chinese citizens, are currently evading authorities, facing potential sentences of up to 10 years in prison if convicted.