The United States Justice Department has unveiled an indictment against cryptocurrency exchange KuCoin and its two founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act. The Department of Justice accused KuCoin founders Chun Gan and Ke Tang of deliberately neglecting to implement an Anti-Money Laundering program, which resulted in the platform being used for money laundering and terrorist financing. In addition, the company itself was charged with running an unlicensed money-transmitting business and violating the BSA.
According to U.S. Attorney Damian Williams, KuCoin and its founders intentionally concealed the fact that a significant number of U.S. users were trading on the platform. He further stated that KuCoin took advantage of its substantial U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, with billions of dollars of daily trades and trillions of dollars of annual trade volume.
The U.S. Commodity Futures Trading Commission (CFTC) also brought civil enforcement charges against KuCoin on March 26, accusing the exchange of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department revealed that KuCoin had received over $5 billion and sent more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang played key roles in the launch of KuCoin in 2017. According to the exchange’s website, its operational headquarters were based in Seychelles. At the time of publication, the two Chinese founders were still at large.
U.S. authorities have been aggressively pursuing criminal charges against cryptocurrency exchanges and their executives operating in the country. Former FTX CEO Sam Bankman-Fried is scheduled to be sentenced on March 28 following his conviction on seven felony charges. Former Binance CEO Changpeng Zhao is expected to receive his sentence on April 30.
The United States enforcement agencies are intensifying their efforts to combat crypto-related crimes.