The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and its two founders for allegedly conspiring to operate an unlicensed money transmitting business and violating the Bank Secrecy Act. The announcement, made on March 26, states that KuCoin founders Chun Gan and Ke Tang intentionally neglected to establish an Anti-Money Laundering program, resulting in the exchange being exploited for money laundering and terrorist financing. Additionally, the company itself has been charged with operating 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 significant number of U.S. users were trading on the platform. He further explained that KuCoin took advantage of its substantial U.S. customer base, allowing it to become one of the largest cryptocurrency derivatives and spot exchanges globally, with billions of dollars in daily trades and trillions of dollars in annual trade volume.
The Department of Justice’s criminal charges were announced simultaneously with a civil enforcement case from the U.S. Commodity Futures Trading Commission (CFTC), which accused KuCoin of multiple violations of the Commodity Exchange Act (CEA) 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 launch of KuCoin in 2017. KuCoin’s operational headquarters were based in Seychelles, as stated on its website. The two founders, who are Chinese nationals, are currently evading arrest.
U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives involved in business activities within the country. Former FTX CEO Sam Bankman-Fried is scheduled to be sentenced on March 28 after being found guilty on seven felony charges. Former Binance CEO Changpeng Zhao is expected to be sentenced on April 30.
The United States enforcement agencies are intensifying their efforts to combat crypto-related crimes.