The United States Justice Department has unveiled charges against KuCoin, a cryptocurrency exchange, and its two founders for participating in an unlicensed money transmitting business and violating the Bank Secrecy Act. The indictment, unsealed on March 26, accuses Chun Gan and Ke Tang, the founders of KuCoin, of intentionally neglecting to establish an Anti-Money Laundering program, which resulted in the platform being used for money laundering and terrorist financing. Furthermore, KuCoin itself is charged with operating an unlicensed money-transmitting business and breaching the BSA.
The U.S. Attorney Damian Williams stated that KuCoin and its founders purposefully concealed the fact that a significant number of users from the United States were trading on the platform. He pointed out that KuCoin exploited its substantial U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, facilitating billions of dollars in daily trades and trillions of dollars in annual trade volume.
In addition to the criminal charges announced by the Department of Justice, the U.S. Commodity Futures Trading Commission (CFTC) also filed a civil enforcement case against KuCoin on March 26. The CFTC charged the exchange with numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations. According to the Justice Department, KuCoin received over $5 billion and transferred more than $4 billion in suspicious and criminal funds.
Chun Gan and Ke Tang played key roles in the launch of KuCoin in 2017. The exchange’s operational headquarters were based in Seychelles, as stated on its website. At the time of publication, both founders, who are Chinese nationals, remained at large.
This recent indictment and enforcement action by U.S. authorities against KuCoin and its founders reflect a broader trend of cracking down on cryptocurrency exchanges and their executives involved in illicit activities within the country. Notably, former FTX CEO Sam Bankman-Fried is scheduled to be sentenced on March 28 after being convicted on seven felony charges. Meanwhile, the former CEO of Binance, Changpeng Zhao, is expected to be sentenced on April 30.
This increased scrutiny and enforcement by U.S. law enforcement agencies highlight their determination to combat crypto-related crimes.