The United States Justice Department has revealed that it has unsealed an indictment against popular cryptocurrency exchange KuCoin and its founders, Chun Gan and Ke Tang. The indictment accuses them of conspiring to operate an unlicensed money transmitting business and violating the Bank Secrecy Act.
According to the announcement made on March 26 by the U.S. Department of Justice, KuCoin founders Gan and Tang deliberately neglected to establish an Anti-Money Laundering program at the exchange, which resulted in the platform being utilized for illegal activities such as money laundering and terrorist financing. In addition to this, the company itself has been charged with operating a money-transmitting business without a license and violating the Bank Secrecy Act.
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. Williams also highlighted that KuCoin took advantage of its large U.S. customer base to become one of the world’s leading cryptocurrency derivatives and spot exchanges, with billions of dollars in daily trades and trillions of dollars in annual trade volume.
The Department of Justice’s criminal charges were announced concurrently with a civil enforcement case filed by the U.S. Commodity Futures Trading Commission (CFTC) on March 26. The CFTC charged KuCoin with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. According to the Justice Department, KuCoin received over $5 billion and transferred more than $4 billion of suspicious and criminal funds.
Gan and Tang played key roles in the establishment of KuCoin in 2017. The exchange’s operational headquarters were based in Seychelles, as stated on its website. At the time of publication, the two Chinese nationals, who are the founders of KuCoin, were still at large.
This latest move by U.S. officials follows a trend of pursuing criminal charges against cryptocurrency exchanges and their executives operating within the country. On March 28, former FTX CEO Sam Bankman-Fried is expected to be sentenced after being convicted on seven felony charges. Former Binance CEO Changpeng Zhao is also anticipated to be sentenced on April 30.
The enforcement agencies in the United States are intensifying their efforts to combat cryptocurrency-related crimes.