The United States Justice Department has unveiled a legal indictment against cryptocurrency exchange KuCoin and its two founders for their involvement in operating an unlicensed money transmitting business and for violating the Bank Secrecy Act (BSA).
According to an announcement made on March 26 by the U.S. Department of Justice, KuCoin founders Chun Gan and Ke Tang intentionally neglected to establish an Anti-Money Laundering program at the exchange, resulting in the platform being exploited for money laundering and terrorist financing activities. The company itself has been charged with operating an unlicensed money transmitting business and breaching the BSA.
U.S. Attorney Damian Williams stated, “KuCoin and its founders deliberately concealed the fact that a significant number of U.S. users were conducting trades on their platform. In fact, 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 filed 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 had sent out more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang played pivotal roles in the establishment of KuCoin in 2017. According to the exchange’s website, KuCoin’s operational headquarters were located in Seychelles. As of now, the two Chinese founders remain at large.
U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives that conduct business within the country. Former FTX CEO Sam Bankman-Fried is scheduled to be sentenced on March 28 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.