The United States Justice Department has unveiled a formal indictment against cryptocurrency exchange KuCoin and two of its founders for their involvement in operating an unlicensed money transmitting business and violating the Bank Secrecy Act (BSA). The announcement was made on March 26 by the U.S. Department of Justice.
According to the indictment, KuCoin founders Chun Gan and Ke Tang knowingly neglected to establish an Anti-Money Laundering program on the exchange, which resulted in the platform being used for money laundering and terrorist financing. The company itself is accused of operating without the necessary license for money transmission and violating the BSA.
U.S. Attorney Damian Williams stated that KuCoin and its founders deliberately concealed the fact that a significant number of U.S. users were trading on the platform. He further revealed that KuCoin had capitalized on 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.
The U.S. Commodity Futures Trading Commission (CFTC) also filed civil enforcement charges against KuCoin on the same day. The CFTC accused the exchange of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department stated that KuCoin had received over $5 billion and sent more than $4 billion of suspicious and criminal funds.
The founders of KuCoin, Gan and Tang, played a significant role in the establishment of the exchange in 2017. KuCoin’s operational headquarters were located in Seychelles, as stated on its website. At the time of publication, the two Chinese nationals remained at large.
Similar criminal charges have been pursued by U.S. officials against other cryptocurrency exchanges and their executives operating within the country. Former FTX CEO Sam Bankman-Fried is set to be sentenced on March 28 after being convicted on seven felony charges. Former Binance CEO Changpeng Zhao is expected to be sentenced on April 30.
Law enforcement agencies in the United States are intensifying their efforts to combat cryptocurrency-related crimes.