The United States Department of Justice has revealed an indictment against cryptocurrency exchange KuCoin and its two founders for conspiring to operate an unlicensed money transferring business and violating the Bank Secrecy Act. In a statement released on March 26, the Justice Department 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 terrorist financing. The company itself has been charged with running 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 substantial number of U.S. users were trading on the platform. He further alleged that KuCoin took advantage of its significant 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 of dollars.
Alongside the criminal charges from the Department of Justice, the U.S. Commodity Futures Trading Commission (CFTC) has filed a civil enforcement case against KuCoin, accusing the exchange of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The CFTC claims that KuCoin has received over $5 billion in suspicious and criminal funds and has transferred more than $4 billion.
Chun Gan and Ke Tang played key roles in the establishment of KuCoin in 2017. KuCoin’s operational headquarters were reportedly based in Seychelles, according to the company’s website. The two founders, who are Chinese nationals, are currently still at large.
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, who was convicted on seven felony charges, is scheduled to be sentenced on March 28. Similarly, former Binance CEO Changpeng Zhao is expected to be sentenced on April 30.
The enforcement agencies in the United States are intensifying their efforts to combat crypto-related crimes.