The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and two of its founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act. The announcement, made on March 26, stated that KuCoin founders Chun Gan and Ke Tang intentionally neglected to establish an Anti-Money Laundering program, resulting in the exchange being exploited for money laundering and terrorist financing. Additionally, the company itself was accused of operating an unlicensed money-transmitting business and contravening the BSA.
U.S. Attorney Damian Williams commented on the case, stating that KuCoin and its founders deliberately concealed the fact that a significant number of U.S. users were trading on their platform. He further explained that KuCoin took advantage of its substantial U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, handling billions of dollars in daily trades and trillions of dollars in annual trade volume.
The Department of Justice’s criminal charges were announced concurrently with a civil enforcement case from the U.S. Commodity Futures Trading Commission (CFTC). On March 26, the CFTC charged KuCoin with multiple violations of the Commodity Exchange Act and CFTC regulations. According to the Justice Department, KuCoin received over $5 billion and sent more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang were instrumental in launching KuCoin in 2017. According to the exchange’s website, its operational headquarters were located in Seychelles. As of the time of publication, the two Chinese founders remained at large.
The U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives operating in the country. On March 28, former FTX CEO Sam Bankman-Fried is scheduled to be sentenced after being convicted on seven felony charges. Former Binance CEO Changpeng Zhao is also expected to be sentenced on April 30.
US enforcement agencies are intensifying their efforts to combat crypto-related crime.