The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and two of its founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act. 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 intentionally neglected to implement an Anti-Money Laundering program at the exchange, resulting in the platform being used for money laundering and terrorist financing. The company itself faces charges for operating an unlicensed money-transmitting business and violating the BSA.
U.S. Attorney Damian Williams stated that KuCoin and its founders made a deliberate effort to hide the fact that a significant number of U.S. users were trading on the platform. He further explained that KuCoin 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 a civil enforcement case against KuCoin on the same day, charging the exchange with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department stated that KuCoin received over $5 billion and sent more than $4 billion of suspicious and criminal funds.
Chun Gan and Ke Tang were instrumental in launching KuCoin in 2017. The exchange’s operational headquarters are located in Seychelles, according to its 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 cryptocurrency exchanges and their executives operating 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 be sentenced on April 30.
The crackdown on crypto-related crime is intensifying, with U.S. enforcement agencies ramping up their efforts.