The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and its two founders for illegally operating a money transmitting business and violating the Bank Secrecy Act. The Department of Justice accused Chun Gan and Ke Tang, the founders of KuCoin, of intentionally neglecting to implement an Anti-Money Laundering program at the exchange, resulting in the platform being used for money laundering and terrorist financing. Furthermore, the company itself is charged with running an unlicensed money transmitting business and breaching the Bank Secrecy Act.
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 daily trades amounting to billions of dollars and an annual trade volume in the trillions.
In addition to the criminal charges announced by the Department of Justice, the U.S. Commodity Futures Trading Commission (CFTC) has also filed a civil enforcement case against KuCoin, accusing the exchange of multiple violations of the Commodity Exchange Act and CFTC regulations. The Justice Department claims that KuCoin has received over $5 billion and has sent more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang were instrumental in launching KuCoin in 2017, with the exchange’s operational headquarters located in Seychelles, as stated on its website. The two founders, who are Chinese nationals, are currently on the run.
The U.S. authorities have been actively pursuing legal action against cryptocurrency exchanges and their executives operating within 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 also expected to be sentenced on April 30.
The enforcement agencies in the U.S. are intensifying their efforts to combat crypto-related crimes.