The United States Justice Department has revealed charges against cryptocurrency exchange KuCoin and its founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act. In a statement on March 26, the Department accused KuCoin founders Chun Gan and Ke Tang of knowingly neglecting to maintain an Anti-Money Laundering program at the exchange, resulting in the platform being utilized for money laundering and financing terrorist activities. Additionally, the company itself was charged with operating an unlicensed money-transmitting business and breaching the BSA.
According to U.S. Attorney Damian Williams, “KuCoin and its founders purposely concealed the fact that a significant number of U.S. users were trading on the platform.” He further stated that KuCoin capitalized on its substantial U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, with daily trades worth billions of dollars and an annual trade volume in the trillions.
The Department of Justice’s criminal charges were presented alongside a civil enforcement case from the U.S. Commodity Futures Trading Commission (CFTC). On March 26, the CFTC charged KuCoin with numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department claims that KuCoin received over $5 billion and sent more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang played instrumental roles in the establishment of KuCoin in 2017. KuCoin’s operational headquarters were reportedly located in Seychelles, according to its website. 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 conducting business within the country. On March 28, former FTX CEO Sam Bankman-Fried is scheduled to be sentenced after being found guilty 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 crackdown on crypto-related criminal activities.