The United States Justice Department has made public an indictment against cryptocurrency exchange KuCoin and its two founders for engaging in an unlicensed money transmitting business and violating the Bank Secrecy Act (BSA). The indictment alleges that Chun Gan and Ke Tang, the founders of KuCoin, failed to establish an Anti-Money Laundering program at the exchange, resulting in the platform being used for money laundering and terrorist financing. 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 deliberately concealed the fact that a significant number of U.S. users were trading on the platform. He further stated that the exchange 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.
The U.S. Department of Justice announced the criminal charges alongside a civil enforcement case brought by the U.S. Commodity Futures Trading Commission (CFTC) on March 26. The CFTC charged KuCoin with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. The Justice Department claims that KuCoin received over $5 billion and sent over $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, according to its website. At the time of publication, the two Chinese founders remain at large.
U.S. authorities have been actively pursuing criminal charges against cryptocurrency exchanges and their executives operating in 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 be sentenced on April 30.
The enforcement agencies in the U.S. are intensifying their efforts to combat crypto-related crimes.