Despite expectations of regulatory harmony, tensions are evident as the CFTC has charged KuCoin under the Commodity Exchange Act and CFTC regulations, along with facing criminal charges from the U.S. Justice Department. The unfolding of these events on March 26 led to a challenging day for KuCoin.

Regulatory Dispute: CFTC vs. SEC

Caroline Pham from the CFTC hinted that their recent actions might blur the line between securities and non-securities, emphasizing the distinction between trading derivatives and owning underlying shares. This conflict extends beyond a regulatory dispute into the core understanding of financial instruments and activities, especially with the emergence of cryptocurrencies like Ethereum.

KuCoin Faces Regulatory Storm

Despite facing regulatory allegations, KuCoin maintained a confident position, reassuring users about the security of their assets. The co-founders, Chun Gan and Ke Tang, are under scrutiny for alleged unlicensed money-transmitting business operations and evasion of anti-money laundering laws. Additionally, KuCoin's reported no-KYC policy facilitated over $9 billion in suspicious transactions, indicating a lack of regulatory compliance.

Regulatory Oversight: KuCoin allegedly conducted transactions from mid-2019 to mid-2023 without proper oversight from the CFTC, as they failed to implement IP verification to prevent U.S. users. This negligence has attracted significant attention from U.S. regulators.