KuCoin and Founders Charged with Bank Secrecy Act and Money Transmission Offenses

KuCoin, along with its founders Chun Gan and Ke Tang, is accused of violating the Bank Secrecy Act and operating an unlicensed money transmission business, allegedly allowing its platform to be used to launder money and finance terrorism.

The United States Department of Justice revealed that KuCoin, one of the world’s largest cryptocurrency exchanges, and its founders, Chun Gan (aka “Michael”) and Ke Tang (aka “Eric”), were charged with criminal offenses related to the Bank Secrecy Act and unlicensed money transmission.

According to the indictment, KuCoin and its founders conspired to operate an unlicensed money transfer business and violated the Bank Secrecy Act by failing to maintain adequate anti-money laundering protections (AML) program. In addition, the charges allege that the exchange failed to implement proper procedures for vetting customers and did not file any suspicious activity reports.

The indictment alleges that KuCoin intentionally concealed the fact that a significant number of US users were trading on its platform. Despite its large customer base, the exchange claims it neglected to comply with US laws designed to prevent money laundering and terrorist financing. As a result, KuCoin reportedly received over $5 billion and sent over $4 billion in suspicious and criminal funds.

US Attorney Damien Williams stressed that financial institutions like KuCoin must comply with US law if they wish to operate in the United States. Williams stated, “Crypto exchanges like KuCoin can’t have it both ways. Today’s indictment should send a clear message to other crypto exchanges: if you plan to serve US clients, you must follow US law, plain and simple.”

HSI Acting Special Agent Darren McCormack praised the investigation that uncovered KuCoin’s alleged multi-billion dollar criminal conspiracy. McCormack said that despite serving more than 30 million customers, the exchange failed to comply with the laws necessary to ensure the security and stability of the digital banking infrastructure.

KuCoin, founded in September 2017 by Chun Gan, Ke Tang and others, has attracted business from US clients through its spot trading and futures trading platforms. Since its inception, the exchange has grown to become one of the largest global cryptocurrency exchange platforms, with daily trading volumes in the billions of dollars and millions of customers.

The indictment marks a significant development in the regulation of cryptocurrency exchanges and highlights the importance of enforcing anti-money laundering laws in the crypto industry. The allegations against KuCoin and its founders serve as a reminder to other exchanges that compliance with US law is essential when serving US customers.

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