The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and its two founders for conspiring to operate an unlicensed money transmitting business and violating the Bank Secrecy Act. In an announcement on March 26, the Department of Justice stated that KuCoin founders Chun Gan and Ke Tang had intentionally failed to maintain an Anti-Money Laundering program at the exchange, resulting in the platform being used for money laundering and terrorist financing. The company itself was charged with operating an unlicensed money-transmitting business and violating the BSA.
According to U.S. Attorney Damian Williams, KuCoin and its founders purposely hid the fact that a significant number of U.S. users traded on the platform. He further 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 of daily trades and trillions of dollars of annual trade volume.
The U.S. Commodity Futures Trading Commission (CFTC) also filed a civil enforcement case against KuCoin on the same day, charging the exchange 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 more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang were instrumental in launching KuCoin in 2017. The operational headquarters of KuCoin, according to its website, were located in Seychelles. As of now, the two Chinese founders remain at large.
The United States has been actively pursuing criminal charges against cryptocurrency exchanges and their executives operating in the country. Sam Bankman-Fried, the former CEO of FTX, is scheduled to be sentenced on March 28 after being convicted on seven felony charges. Changpeng Zhao, the former CEO of Binance, is expected to be sentenced on April 30.
US enforcement agencies are intensifying their efforts to combat crypto-related crime.