The United States Department of Justice has unveiled a legal indictment against cryptocurrency exchange KuCoin and its two founders for participating in an unlicensed money transmission business and violating the Bank Secrecy Act. The charges state that KuCoin founders, Chun Gan and Ke Tang, intentionally neglected to establish an Anti-Money Laundering program, resulting in the exchange being exploited for money laundering and terrorist financing. Additionally, the company itself has been accused of operating without a license for money transmission and breaching the BSA.
U.S. Attorney Damian Williams asserted that KuCoin and its founders purposely concealed the fact that a significant number of U.S. users were conducting trades on the platform. He further stated that KuCoin took advantage of its large U.S. customer base, becoming one of the world’s leading 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 simultaneously announced alongside a civil enforcement case filed by the U.S. Commodity Futures Trading Commission (CFTC) against KuCoin. The CFTC cited multiple violations of the Commodity Exchange Act (CEA) and its regulations on March 26. The Justice Department additionally claimed that KuCoin handled over $5 billion in suspicious and criminal funds, with more than $4 billion being sent out.
Chun Gan and Ke Tang were instrumental in establishing KuCoin in 2017. According to the company’s website, KuCoin’s main operational base was located in Seychelles. At the time of publication, both founders, who are Chinese nationals, remained at large.
This move by U.S. authorities reflects a trend of pursuing criminal charges against cryptocurrency exchanges and their executives that conduct business within the country. Former FTX CEO Sam Bankman-Fried, who was convicted on seven felony charges, is scheduled to be sentenced on March 28. Similarly, former Binance CEO Changpeng Zhao is expected to be sentenced on April 30.
The United States enforcement agencies are intensifying their efforts to combat crypto-related criminal activities.