July 21, 2024
DOJ Charges KuCoin Founders with AML Violations
Latest Cryptocurrency News

DOJ Charges KuCoin Founders with AML Violations

The United States Justice Department unsealed an indictment against cryptocurrency exchange KuCoin and two of its founders for “conspiring to operate an unlicensed money transmitting business” and violations of the Bank Secrecy Act (BSA). The indictment, revealed in a March 26 announcement, targeted KuCoin founders Chun Gan and Ke Tang for allegedly failing to maintain an Anti-Money Laundering (AML) program at the exchange, allowing it to be utilized for “money laundering and terrorist financing.” KuCoin itself faced charges of operating an unlicensed money-transmitting business and violating the BSA.

Accusations and Allegations

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. Despite this, KuCoin purportedly capitalized on its sizable U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, boasting billions of dollars of daily trades and trillions of dollars of annual trade volume. Williams added:

“[I]n failing to implement even basic anti-money laundering policies, the defendants allowed KuCoin to operate in the shadows of the financial markets and be used as a haven for illicit money laundering.”

The U.S. Department of Justice (DOJ) announced the criminal charges in conjunction with a civil enforcement case from the U.S. Commodity Futures Trading Commission (CFTC). The CFTC charged KuCoin with “multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations” on the same day. Allegedly, KuCoin handled more than $5 billion and transmitted over $4 billion of “suspicious and criminal funds.”

Founders’ Background and Legal Action

Chun Gan and Ke Tang played instrumental roles in launching KuCoin in 2017. Although KuCoin’s operational headquarters were reportedly based in Seychelles, the founders, both Chinese nationals, remained at large at the time of publication. This indictment follows a trend of U.S. officials pursuing criminal charges against crypto exchanges and their executives operating within the country.

Notably, former FTX CEO Sam Bankman-Fried is scheduled for sentencing on March 28 after being convicted on seven felony charges. Similarly, former Binance CEO Changpeng Zhao is expected to be sentenced on April 30, indicating heightened scrutiny of crypto-related activities by U.S. authorities.

Image by freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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