The United States Department of Justice has unveiled charges against cryptocurrency exchange KuCoin and its founders for engaging in illegal money transmitting activities and violating the Bank Secrecy Act. In a statement released on March 26, the Department of Justice accused KuCoin founders Chun Gan and Ke Tang of intentionally neglecting to implement an Anti-Money Laundering program, which resulted in the exchange being used for money laundering and financing terrorist activities. Additionally, KuCoin itself was charged with operating an unlicensed money transmitting business and breaching the Bank Secrecy Act.
According to U.S. Attorney Damian Williams, KuCoin and its founders purposefully concealed the fact that a significant number of U.S. users were trading on the platform. Williams 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 in daily trades and trillions of dollars in annual trade volume.
The Department of Justice’s criminal charges were announced simultaneously with a civil enforcement case brought by the U.S. Commodity Futures Trading Commission (CFTC) on March 26. The CFTC charged KuCoin with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department revealed that KuCoin had received over $5 billion and sent over $4 billion in suspicious and criminal funds.
Chun Gan and Ke Tang played key roles in the establishment of KuCoin in 2017. According to the exchange’s website, KuCoin’s operational headquarters were located in Seychelles. At the time of publication, the two Chinese founders remained at large.
The U.S. government has been actively pursuing criminal charges against cryptocurrency exchanges and their executives operating within the country. On March 28, former FTX CEO Sam Bankman-Fried will be sentenced after being convicted on seven felony charges. Former Binance CEO Changpeng Zhao is expected to receive his sentence on April 30.
The enforcement agencies in the United States are intensifying their efforts to combat crypto-related crimes.