The United States Department of Justice has unveiled an indictment against cryptocurrency exchange KuCoin and its two founders for engaging in illegal activities, including operating an unlicensed money transmitting business and violating the Bank Secrecy Act. The announcement, made on March 26, stated that Chun Gan and Ke Tang, the founders of KuCoin, intentionally neglected to establish an Anti-Money Laundering program, which led to the exchange being used for money laundering and terrorist financing. The company itself was charged with conducting an unlicensed money-transmitting business and breaching the BSA.
U.S. Attorney Damian Williams stated that KuCoin and its founders purposely concealed the fact that a significant number of American users were trading on their platform. He further revealed that KuCoin seized the opportunity to leverage its extensive U.S. customer base, becoming 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.
In addition to the criminal charges brought by the Department of Justice, the U.S. Commodity Futures Trading Commission (CFTC) also filed a civil enforcement case against KuCoin on March 26. The CFTC accused KuCoin of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department stated that KuCoin had received over $5 billion in suspicious and criminal funds and had sent more than $4 billion of such funds.
Chun Gan and Ke Tang played instrumental roles in the establishment of KuCoin in 2017. According to the exchange’s website, its operational headquarters were based in Seychelles. As of the time of publication, the two Chinese founders remained 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 found guilty of seven felony charges. Similarly, 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.