The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and its two founders for their involvement in operating an unlicensed money transmitting business and violating the Bank Secrecy Act. The Department of Justice stated that Chun Gan and Ke Tang, the founders of KuCoin, purposely neglected to establish an Anti-Money Laundering program, resulting in the platform being utilized for money laundering and terrorist financing activities. In addition to the founders, the company itself has been charged with operating an unlicensed money transmitting business and violating the BSA.
U.S. Attorney Damian Williams accused KuCoin and its founders of intentionally concealing the fact that a significant number of U.S. users were engaging in trading on the platform. KuCoin allegedly capitalized on its substantial U.S. customer base, becoming one of the world’s largest cryptocurrency derivatives and spot exchanges, with daily trades worth billions of dollars and an annual trade volume amounting to trillions of dollars.
The U.S. Commodity Futures Trading Commission (CFTC) also filed a civil enforcement case against KuCoin on the same day, charging them with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department revealed that KuCoin had received over $5 billion and transferred more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang were instrumental in the establishment of KuCoin in 2017, with the operational headquarters located in Seychelles, as stated on the exchange’s website. At the time of publication, the two Chinese founders were still at large.
This recent legal action by U.S. authorities is part of a broader crackdown on cryptocurrency exchanges and their executives involved in unlawful activities within the country. Former FTX CEO Sam Bankman-Fried is set to be sentenced on March 28 after being convicted on seven felony charges, while former Binance CEO Changpeng Zhao is expected to be sentenced on April 30.
US enforcement agencies are intensifying their efforts to combat crypto-related crimes.