KuCoin and two founders accused by US Justice Department of breaking AML regulations

The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and its two founders for allegedly conspiring to operate an unlicensed money transmitting business and violating the Bank Secrecy Act. In an announcement on March 26, the Department of Justice accused KuCoin founders Chun Gan and Ke Tang of willfully neglecting 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 is facing charges of operating an unlicensed money-transmitting business and breaching the BSA. U.S. Attorney Damian Williams stated that KuCoin and its founders intentionally concealed the fact that a significant number of U.S. users were trading on the platform. He also noted that KuCoin took advantage of its substantial U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, facilitating billions of dollars of daily trades and trillions of dollars of annual trade volume. The U.S. Commodity Futures Trading Commission (CFTC) filed a separate civil enforcement case against KuCoin on the same day, charging the exchange with multiple violations of the Commodity Exchange Act and CFTC regulations. The Justice Department alleges that KuCoin received over $5 billion and transmitted more than $4 billion of suspicious and criminal funds. The founders of KuCoin, Gan and Tang, were instrumental in the establishment of the exchange in 2017. According to the website, KuCoin’s operational headquarters are in Seychelles. At the time of publication, the two 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 set to be sentenced on March 28 after being convicted on seven felony charges, while former Binance CEO Changpeng Zhao is expected to receive his sentence on April 30. The crackdown on crypto-related crime by U.S. enforcement agencies appears to be intensifying.