The United States Justice Department has unveiled an indictment against cryptocurrency exchange KuCoin and two of its founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act. In a statement on March 26, the Department of Justice accused KuCoin founders Chun Gan and Ke Tang of knowingly neglecting to establish an Anti-Money Laundering program at the exchange, resulting in the platform being used for money laundering and financing terrorism. The company itself is facing charges of operating without a license 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. He added that KuCoin took advantage of its large U.S. customer base to become one of the world’s biggest 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 alongside a civil enforcement case from the U.S. Commodity Futures Trading Commission (CFTC). On March 26, the CFTC charged KuCoin with multiple violations of the Commodity Exchange Act and CFTC regulations. According to the Justice Department, KuCoin received over $5 billion and sent more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang played key roles in the establishment of KuCoin in 2017. The exchange’s operational headquarters were based in Seychelles, according to its website. At the time of publication, the two Chinese founders were still at large.
U.S. authorities have been taking aggressive 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 scheduled to be sentenced on April 30.
The crackdown on crypto-related crime by U.S. enforcement agencies continues to intensify.