Allegations Under the Commodity Exchange Act
The enforcement action accused the defendants of a series of violations under the Commodity Exchange Act and related CFTC regulations.
In its complaint, the CFTC alleged that KuCoin unlawfully engaged in off-exchange commodity futures transactions and in leveraged, margined or financed retail commodity transactions.
The agency also contended that the exchange solicited and accepted orders for commodity futures, swaps and leveraged retail commodity trades without registering as a futures commission merchant.
Further, regulators alleged that KuCoin failed to diligently supervise its activities as an FCM, operated a platform for trading or processing swaps without registering as a swap execution facility or designated contract market, and did not implement an effective customer identification program.
Those allegations painted a portrait of a fast-moving digital marketplace operating, in the regulator’s view, outside the guardrails designed to police U.S. derivatives markets.
