The United States Justice Department has unveiled an indictment against cryptocurrency exchange KuCoin and two of its founders, accusing them of conspiring to operate an unlicensed money transmitting business and violating the Bank Secrecy Act (BSA).
According to an announcement made on March 26, the U.S. Department of Justice stated that KuCoin founders Chun Gan and Ke Tang intentionally neglected 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 operating an unlicensed money-transmitting business and violating the BSA.
U.S. Attorney Damian Williams stated, “KuCoin and its founders deliberately concealed the fact that a significant number of U.S. users were trading on KuCoin’s platform. In fact, KuCoin allegedly leveraged its substantial U.S. customer base 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.”
In addition to the criminal charges announced by the DOJ, the U.S. Commodity Futures Trading Commission (CFTC) has also filed a civil enforcement case against KuCoin on March 26, accusing the exchange of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department claims that KuCoin received over $5 billion and transferred more than $4 billion in suspicious and criminal funds.
Chun Gan and Ke Tang played instrumental roles in launching KuCoin in 2017. According to the exchange’s website, its operational headquarters are located in Seychelles. At the time of publication, the two Chinese founders remain at large.
U.S. officials have been actively pursuing criminal charges against cryptocurrency exchanges and their executives operating within the country. On March 28, former FTX CEO Sam Bankman-Fried is scheduled to be sentenced after being convicted 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.