U.S. Department of Justice officials have opened an indictment against cryptocurrency exchange KuCoin and two of its founders for "conspiracy to operate an unlicensed money transmission business" and violations of the Bank Secrecy Act (BSA).
In a March 26 statement, the U.S. Department of Justice said that KuCoin's founders, Chun Gan and Ke Tang, deliberately failed to run an anti-money laundering program on the exchange, which led to the platform being used for "money laundering and terrorist financing." The company itself has been accused of conducting illegal remittance activities and violating the BSA.
"KuCoin and its founders deliberately sought to conceal the fact that a significant number of U.S. users were transacting on the KuCoin platform," - US Attorney Damian Williams said. "Indeed, KuCoin allegedly leveraged its substantial US customer base to become one of the world's largest cryptocurrency derivatives and spot exchanges, with billions of dollars in daily transactions and trillions of dollars in annual trading volume."
Williams added:
"By failing to implement even basic anti-money laundering rules, the defendants allowed KuCoin to operate in the shadow of the financial markets and use it as a haven for illegal money laundering."
The Justice Department's criminal charges were announced alongside a civil case by the U.S. Commodity Futures Trading Commission (CFTC), which on March 26 charged KuCoin with "multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations." The Justice Department awarded KuCoin more than $5 billion and sent more than $4 billion in "suspicious and criminal funds."
