U.S. prosecutors have filed criminal charges against KuCoin and two of its founders, Chun Gan and Ke Tang, accusing the global cryptocurrency exchange of violating U.S. anti-money-laundering laws. The indictment, unsealed Tuesday, accuses KuCoin of violating the Bank Secrecy Act and operating an unlicensed money transmitting business, along with related conspiracy charges. Additionally, the U.S. Commodity and Futures Trading Commission filed parallel civil charges against KuCoin for operating as an illegal digital asset derivatives exchange and multiple violations of the Commodity Exchange Act. If convicted, Gan and Tang could each face up to 10 years in prison.
KuCoin’s Chief Executive Johnny Lyu assured users in a statement that despite the regulatory matter, the platform remains unaffected and operates normally, ensuring the safety of users’ assets. Efforts to reach Gan and Tang for comment weren’t successful, and it’s unclear if they have obtained legal representation. Prosecutors allege that KuCoin intentionally failed to implement adequate anti-money-laundering measures, including procedures to verify customer identities and report suspicious activities.
According to prosecutors, KuCoin’s failures in anti-money-laundering controls led to the exchange being used for illicit finance activities, with customers seeking out KuCoin for its anonymity. Since 2017, the exchange allegedly received over $5 billion and sent over $4 billion in suspicious and criminal proceeds. KuCoin, founded in September 2017, has grown to service more than 30 million customers with billions of dollars’ worth of crypto in daily trading volume, operating collectively under entities like PhoenixFin, Flashdot, and Peken Global.
