The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and its two founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act. The indictment, unsealed by officials, accuses 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. Additionally, KuCoin itself has been charged with operating an unlicensed money transmitting business and violating the BSA.
U.S. Attorney Damian Williams stated that KuCoin and its founders intentionally concealed the fact that a significant number of U.S. users were trading on the platform. Williams further highlighted that the exchange took advantage of its substantial U.S. customer base, growing 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 announcement of the DOJ criminal charges coincided with a civil enforcement case initiated by the U.S. Commodity Futures Trading Commission (CFTC). 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.
Chun Gan and Ke Tang played key roles in the establishment of KuCoin in 2017, with the exchange’s operational headquarters located in Seychelles, as stated on its website. However, the two Chinese founders remain at large at the time of this publication.
U.S. authorities have been actively pursuing criminal charges 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 receive sentencing on April 30.
The enforcement agencies in the United States are intensifying their efforts to combat crypto-related crimes.