The United States Justice Department has revealed a legal indictment against cryptocurrency exchange KuCoin and its two founders for their involvement in an unlicensed money transmitting business and violations of the Bank Secrecy Act. The announcement, made on March 26, stated that KuCoin founders Chun Gan and Ke Tang had intentionally neglected 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 has been charged with operating without a license and contravening the BSA.
According to U.S. Attorney Damian Williams, KuCoin and its founders deliberately concealed the fact that a significant number of U.S. users were engaging in trading on the platform. Williams further highlighted that KuCoin capitalized on its substantial U.S. customer base, leading to its growth as one of the world’s largest cryptocurrency derivatives and spot exchanges, facilitating billions of dollars worth of daily trades and trillions of dollars in annual trade volume.
Simultaneously, the U.S. Commodity Futures Trading Commission (CFTC) initiated a civil enforcement case against KuCoin on March 26, charging the exchange with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department revealed that KuCoin had received over $5 billion and transferred more than $4 billion in suspicious and criminal funds.
Chun Gan and Ke Tang were instrumental in the establishment of KuCoin in 2017, with the operational headquarters located in Seychelles, as per the exchange’s website. At the time of publication, the two founders, who are Chinese nationals, remained at large.
U.S. authorities have been actively pursuing criminal charges against crypto exchanges and their executives operating in the country. For instance, on March 28, former FTX CEO Sam Bankman-Fried is scheduled to be sentenced following his conviction on seven felony charges. Similarly, former Binance CEO Changpeng Zhao is expected to receive his sentence on April 30.
The enforcement agencies in the United States are intensifying their efforts to combat crypto-related criminal activities.