The United States Justice Department has unveiled a legal indictment against cryptocurrency exchange KuCoin and its two founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act. The KuCoin founders, Chun Gan and Ke Tang, allegedly failed to establish an Anti-Money Laundering program at the exchange, resulting in the platform being exploited for money laundering and terrorist financing activities. The company itself is accused of operating without a license for money transmission and violating the BSA.
According to U.S. Attorney Damian Williams, KuCoin and its founders intentionally concealed the fact that a significant number of U.S. users were conducting trades on their platform. He further stated that KuCoin capitalized on its extensive U.S. customer base to become one of the world’s largest cryptocurrency spot and derivatives exchanges, facilitating 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). The CFTC charged KuCoin with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department alleges that 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 launching 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 evading law enforcement.
The U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives operating in the country. For instance, Sam Bankman-Fried, the former CEO of FTX, is scheduled to be sentenced on March 28 after being convicted on seven felony charges. Similarly, the former CEO of Binance, 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.