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 (BSA).
In a statement released on March 26, the Department of Justice stated that KuCoin founders Chun Gan and Ke Tang deliberately neglected to establish an Anti-Money Laundering program at the exchange, resulting in the platform being utilized for money laundering and financing terrorist activities. The company itself has been charged with operating an unlicensed money-transmitting business and violating the BSA.
According to U.S. Attorney Damian Williams, “KuCoin and its founders intentionally concealed the fact that a significant number of U.S. users were trading on KuCoin’s platform.” Williams further 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 in daily trades and trillions of dollars in annual trade volume.
Simultaneously with the Department of Justice’s criminal charges, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement case against KuCoin on March 26, accusing the exchange of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department alleges 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 the establishment of KuCoin in 2017, with the exchange’s operational headquarters based in Seychelles, as stated on its website. At present, the two founders, who are Chinese nationals, remain 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, convicted on seven felony charges, is scheduled to be sentenced on March 28. 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 crimes.