The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and its two founders for engaging in a conspiracy to operate an unlicensed money transmitting business and violating the Bank Secrecy Act (BSA).
According to the U.S. Department of Justice, KuCoin founders Chun Gan and Ke Tang intentionally neglected to establish an Anti-Money Laundering program at the exchange, resulting in the platform being utilized for money laundering and terrorist financing. The company itself has been charged with operating an unlicensed money-transmitting business and violating the BSA.
U.S. Attorney Damian Williams stated that KuCoin and its founders deliberately concealed the fact that a significant number of U.S. users were trading on the platform. Furthermore, KuCoin allegedly capitalized on its substantial U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, facilitating daily trades worth billions of dollars and annual trade volume in trillions of dollars.
The Department of Justice’s criminal charges coincide with a civil enforcement case filed by the U.S. Commodity Futures Trading Commission (CFTC) against KuCoin. The CFTC accuses the exchange of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department claims that KuCoin received over $5 billion and transmitted more than $4 billion of suspicious and criminal funds.
KuCoin was launched in 2017 by Gan and Tang, with its operational headquarters based in Seychelles, according to the exchange’s website. The two Chinese founders are currently at large.
U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives operating within the country. Former FTX CEO Sam Bankman-Fried is set to be sentenced on March 28 after being convicted on seven felony charges. Former Binance CEO Changpeng Zhao is expected to be sentenced on April 30.
The United States enforcement agencies are intensifying their efforts to combat cryptocurrency-related crimes.