The United States Justice Department has unveiled a legal case against cryptocurrency exchange KuCoin and two of its founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act (BSA). The indictment alleges that KuCoin founders Chun Gan and Ke Tang deliberately neglected to establish an Anti-Money Laundering program for the exchange, resulting in the platform being exploited for money laundering and terrorist financing activities. Additionally, the company itself has been charged with operating an unlicensed money-transmitting business and contravening the BSA.
In a statement made on March 26, the U.S. Department of Justice revealed that KuCoin and its founders intentionally concealed the fact that a significant number of U.S. users were trading on the platform. U.S. Attorney Damian Williams highlighted that KuCoin took advantage of its substantial U.S. customer base, enabling it to become one of the world’s largest cryptocurrency derivatives and spot exchanges, facilitating billions of dollars of daily trades and trillions of dollars of annual trade volume.
The Justice Department’s criminal charges were announced concurrently with a civil enforcement case brought by 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. According to the Justice Department, KuCoin received over $5 billion and transmitted more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang played instrumental roles in the establishment of KuCoin in 2017. The exchange’s operational headquarters, as stated on its website, were located in Seychelles. At the time of publication, the two Chinese founders remained at large.
U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives conducting business within the country. Former FTX CEO Sam Bankman-Fried is scheduled to be sentenced on March 28 after being convicted on seven felony charges. Former Binance CEO Changpeng Zhao is expected to receive his sentence on April 30.
The United States enforcement agencies are intensifying their efforts to combat crypto-related criminal activities.