KuCoin, along with its founders Chun Gan and Ke Tang, has been accused of violating bank secrecy laws and operating an unlicensed money transfer business, and has reportedly allowed its platform to be used for money laundering and terrorist financing.
The U.S. Department of Justice said KuCoin, one of the world’s largest cryptocurrency exchanges, and its founders Chun Gan (aka “Michael”) and Ke Tang (aka “Eric”) have been indicted on criminal charges. Crimes related to the Bank Secrecy Act and unlicensed money transfers.
According to the indictment, KuCoin and its founders conspired to operate an unlicensed money-laundering business and violated the Bank Secrecy Act by failing to maintain appropriate anti-money laundering measures.AML) program. The charges also allege that the exchange failed to implement proper customer verification procedures and failed to file suspicious activity reports.
The indictment alleges that KuCoin intentionally concealed the fact that a significant number of U.S. users were transacting on the KuCoin platform. Despite its large customer base, the exchange reportedly failed to comply with U.S. laws designed to prevent money laundering and terrorist financing. As a result, it was reported that KuCoin received more than $5 billion and sent more than $4 billion in suspicious and criminal funds.
U.S. Attorney Damian Williams emphasized that financial institutions like KuCoin must comply with U.S. laws if they want to operate in the United States. “Cryptocurrency exchanges like KuCoin can’t have it both ways,” Williams said. “Today’s indictment should send a clear message to other cryptocurrency exchanges: If they want to serve U.S. customers, they must follow U.S. law, plain and simple. “It is,” he said.
HSI Acting Special Agent Darren McCormack praised the investigation that exposed KuCoin’s alleged multibillion-dollar criminal conspiracy. McCormack said that despite serving more than 30 million customers, the exchange failed to comply with laws needed to ensure the security and stability of its digital banking infrastructure.
Founded in September 2017 by Chun Gan, Ke Tang, and others, KuCoin has attracted business from US customers through its spot and futures trading platforms. Since its founding, the exchange has grown to become one of the largest global cryptocurrency exchange platforms with billions of dollars in daily trading volume and millions of customers.
This indictment marks a significant development in the regulation of cryptocurrency exchanges and highlights the importance of enforcing anti-money laundering laws in the cryptocurrency industry. The indictment against KuCoin and its founders serves as a reminder to other exchanges that compliance with U.S. laws is essential when serving U.S. customers.
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