The United States Department of Justice 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 indictment, which was unsealed on March 26, accuses KuCoin founders Chun Gan and Ke Tang of willfully neglecting to implement an Anti-Money Laundering program at the exchange, resulting in the platform being used for money laundering and terrorist financing. The company itself is charged with operating an unlicensed money-transmitting business and breaching the BSA.
According to U.S. Attorney Damian Williams, KuCoin and its founders deliberately 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 of daily trades and trillions of dollars of annual trade volume.
The Department of Justice’s criminal charges coincide with a civil enforcement case brought by the U.S. Commodity Futures Trading Commission (CFTC) on March 26. The CFTC has 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 over $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang were instrumental in launching KuCoin in 2017. KuCoin’s operational headquarters were based in Seychelles, according to its website. At the time of publication, the two Chinese founders remained at large.
U.S. authorities have been cracking down on crypto exchanges and their executives conducting business in 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 crypto-related crimes.