Crypto Exchange KuCoin and Founders Indicted for Bank Secrecy Act Violations

The U.S. Department of Justice (DOJ) and the Commodities Futures Trading Commission (CFTC) have taken action against crypto exchange KuCoin and its founders, signaling a significant crackdown on alleged violations of the Bank Secrecy Act.

According to a statement from the U.S. Attorney’s Office in the Southern District of New York, U.S. Attorney Damian Williams and Darren McCormack, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), revealed that KuCoin founders Chun Gan and Ke Tang stand accused of orchestrating multiple infractions of financial regulations.

The indictment accuses KuCoin and its founders of establishing an “unlicensed money transmitting business” and failing to uphold an adequate anti-money laundering (“AML”) program. Additionally, they allegedly neglected to verify customer identities adequately and omitted to report suspicious activity.

Attorney Williams emphasized that KuCoin and its founders knowingly concealed the significant presence of U.S. users on their platform. Despite becoming a global powerhouse in cryptocurrency trading, with billions of dollars in daily transactions, they allegedly sidestepped their legal obligations under U.S. law.

The Alleged Financial Misdeeds

Williams further claimed that KuCoin engaged in extensive financial transactions, receiving over $5 billion and channeling more than $4 billion in what authorities deem “suspicious and criminal funds.” Darren McCormack echoed these sentiments, branding KuCoin as an “alleged multibillion-dollar criminal conspiracy.”

Gan and Tang now confront serious charges, each facing one count of conspiring to breach the Bank Secrecy Act and one count of conspiring to operate an unlicensed money-transmitting business. If found guilty, they could each serve a maximum sentence of five years in prison.

The indictment against KuCoin and its founders underscores the government’s commitment to enforcing financial regulations in the rapidly evolving landscape of cryptocurrency. As the legal battle unfolds, it prompts a reassessment of compliance standards within the crypto industry and highlights the potential repercussions for those found in violation of established laws.