The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and two of its founders for engaging in a conspiracy to operate an unlicensed money transmitting business and for violating the Bank Secrecy Act. In an announcement made on March 26, the U.S. Department of Justice stated that KuCoin founders Chun Gan and Ke Tang deliberately failed to establish an Anti-Money Laundering program at the exchange, resulting in the platform being utilized for money laundering and terrorist financing. The company itself is accused of operating an unlicensed money-transmitting business and breaching the BSA.
U.S. Attorney Damian Williams stated that KuCoin and its founders knowingly concealed the fact that a significant number of U.S. users were trading on the platform. He also highlighted that KuCoin took advantage of its substantial U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, facilitating billions of dollars of daily trades and trillions of dollars of annual trade volume.
The DOJ’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 (CEA) and CFTC regulations. According to the Justice Department, KuCoin received over $5 billion and transferred more than $4 billion of suspicious and criminal funds.
KuCoin founders Gan and Tang played key roles in the establishment of the exchange in 2017. KuCoin’s operational headquarters, as stated on its website, is based in Seychelles. At the time of publication, the two Chinese founders were still at large.
U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives operating within 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.
The enforcement agencies in the United States are intensifying their efforts to combat crypto-related crimes.