KuCoin and Founders Charged with Bank Secrecy Act and Money Transmission Offenses

The United States Department of Justice has revealed that KuCoin, one of the world’s largest cryptocurrency exchanges, and its founders, Chun Gan (also known as “Michael”) and Ke Tang (also known as “Eric”), have been charged with criminal offenses related to the Bank Secrecy Act and unlicensed money transmission.

According to the indictment, KuCoin and its founders conspired to operate an unlicensed money transmitting business and violated the Bank Secrecy Act by failing to maintain an adequate anti-money laundering (AML) program. The charges further allege that the exchange failed to implement proper customer verification procedures and did not file any suspicious activity reports.

The indictment claims that KuCoin deliberately concealed the fact that a significant number of U.S. users were trading on its platform. Despite the large customer base, the exchange allegedly neglected to comply with U.S. laws designed to prevent money laundering and terrorist financing. As a result, KuCoin reportedly received over $5 billion and sent over $4 billion of suspicious and criminal funds.

U.S. Attorney Damian Williams emphasized that financial institutions like KuCoin must comply with U.S. law if they wish to operate in the United States. Williams stated, “Crypto exchanges like KuCoin cannot have it both ways. Today’s Indictment should send a clear message to other crypto exchanges: if you plan to serve U.S. customers, you must follow U.S. law, plain and simple.”

HSI Acting Special Agent in Charge Darren McCormack commended the investigation that exposed KuCoin’s alleged multibillion-dollar criminal conspiracy. McCormack stated that despite servicing over 30 million customers, the exchange failed to follow laws necessary to ensure the security and stability of the digital banking infrastructure.

KuCoin, founded in September 2017 by Chun Gan, Ke Tang, and others, solicited business from U.S. customers through its spot trading and futures trading platforms. Since its inception, the exchange has grown to become one of the largest global cryptocurrency exchange platforms, with daily trading volumes in the billions of dollars and millions of customers.

The indictment marks a significant development in the regulation of cryptocurrency exchanges and highlights the importance of enforcing anti-money laundering laws in the crypto industry. The charges against KuCoin and its founders serve as a reminder to other exchanges that compliance with U.S. law is essential when serving U.S. customers.

Image source: Shutterstock