TL;DR
- US justice indictment against KuCoin and its founders for violating the Bank Secrecy Act and operating without a license.
- KuCoin involved in money laundering and terrorist financing, with movements of billions of dollars.
- Founders face up to five years in prison; Associated entities could receive sentences of up to ten years.
The United States justice system has charged global cryptocurrency exchange KuCoin and two of its founders, Chun Gan and Ke Tang, for allegedly violating the Bank Secrecy Act and operating an unlicensed money transmission business.
According to the Department of Justice, KuCoin has facilitated money laundering and terrorist financing through its platform, receiving more than $5 billion and sending more than $4 billion in suspicious and criminal funds since its founding in 2017.
The indictment states that the company deliberately sought customers in the United States, becoming one of the largest cryptocurrency exchanges in the world with more than 30 million users and billions of dollars in daily trading volume.
Despite this, KuCoin allegedly failed to comply with US anti-money laundering laws, including implementing an adequate anti-money laundering program and know-your-customer (KYC) processes.
According to the indictment, the company, Gan and Tang would have deliberately failed to comply with US anti-money laundering obligations, failing to implement an adequate KYC program until July 2023 and actively concealing the existence of US clients.
KuCoin’s no-KYC policy allegedly facilitated laundering of large sums of criminal money
As a result of these actions, they were implicated in the receipt of more than $5 billion and the transfer of in excess of $4 billion in illicit funds, contributing to the perpetuation of financial crimes.
Gan and Tang, both Chinese nationals, face charges that could result in up to five years in prison each.
Additionally, entities associated with KuCoin face charges with possible sentences of up to ten years in prison.
The investigation was conducted by HSI New York’s El Dorado Task Force, with assistance from the Commodity Futures Trading Commission, which filed a parallel civil action against KuCoin.
Importantly, the allegations in the indictment are just that, accusations, and defendants are presumed innocent until proven guilty at trial.
