US Justice Department Indicts KuCoin and Founders for Money Laundering

The Justice Department has indicted cryptocurrency exchange KuCoin and two of its founders for violating anti-money laundering laws. Prosecutors allege that KuCoin founders Chun Gan and Ke Tang operated an unlicensed money transmitting business and failed to maintain an anti-money laundering program, allowing KuCoin to be used for money laundering and terrorist financing. The indictment also alleges that KuCoin deliberately concealed the presence of U.S. users, enabling it to become a major cryptocurrency exchange without implementing basic anti-money laundering policies.

Justice Department Charges KuCoin and Founders with Money Laundering Violations

The Justice Department unveiled an indictment Tuesday accusing cryptocurrency exchange KuCoin and two of its founders, Chun Gan and Ke Tang, of breaching anti-money laundering statutes.

Federal prosecutors maintain that the exchange founders conspired to operate an unlicensed money transmission business and contravened the Bank Secrecy Act by failing to establish an effective anti-money laundering program. This omission allegedly allowed KuCoin to be exploited for money laundering and terrorist financing.

A KuCoin representative did not immediately respond to a request for comment.

The indictment alleges that KuCoin and its founders intentionally concealed the substantial volume of U.S. users trading on the platform. This concealment contributed to KuCoin's rise as one of the world's largest cryptocurrency derivatives and spot exchanges, despite its lack of fundamental anti-money laundering policies.

The government asserts that since its inception in 2017, KuCoin has transacted more than $5 billion in suspicious and illicit funds. Additionally, the indictment alleges that the founders and the exchange neglected to implement proper procedures for verifying customer identities and failed to file suspicious activity reports.

As of Tuesday, the founders had not been apprehended, as per the Justice Department.

Concurrently, the Commodity Futures Trading Commission filed a separate civil lawsuit against KuCoin and its founders, accusing them of violating trader regulations and the Bank Secrecy Act.

This indictment is part of an ongoing crackdown on illicit activities within the cryptocurrency industry. Regulatory bodies aim to enhance transparency and accountability in an evolving and potentially vulnerable financial ecosystem.