The United States Justice Department has revealed an indictment against cryptocurrency exchange KuCoin and its founders for participating in an unlicensed money transmitting business and violating the Bank Secrecy Act. The announcement, made on March 26, states that KuCoin founders Chun Gan and Ke Tang intentionally neglected to implement an Anti-Money Laundering program at the exchange, resulting in the platform being utilized for money laundering and terrorist financing. The company itself has been accused of operating an unlicensed money transmitting business and breaching the BSA.
U.S. Attorney Damian Williams stated that KuCoin and its founders purposely concealed the fact that a significant number of U.S. users were trading on the platform. In fact, KuCoin allegedly exploited its substantial U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, handling billions of dollars of daily trades and trillions of dollars of annual trade volume.
In tandem with the criminal charges from the Department of Justice, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement case against KuCoin on March 26. The CFTC accused KuCoin of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department claims 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, with the operational headquarters located in Seychelles, according to the exchange’s website. At present, the two Chinese founders remain at large.
The U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives conducting business within the country. On March 28, former FTX CEO Sam Bankman-Fried is scheduled to be sentenced after being convicted on seven felony charges. Former Binance CEO Changpeng Zhao is expected to receive his sentence on April 30.
US enforcement agencies are intensifying their efforts to combat crypto-related crime, signaling a heightened focus on this issue.