- Crypto
- March 27, 2024
- 3 minutes read
U.S. Feds Indict KuCoin And Founders On Criminal Charges
The United States Justice Department has filed criminal charges against KuCoin, a popular cryptocurrency exchange, and its founders. The exchange…
The United States Justice Department has filed criminal charges against KuCoin, a popular cryptocurrency exchange, and its founders. The exchange is accused of flouting anti-money laundering laws and operating an unlicensed money-transmitting business.
Prosecutors accused KuCoin of soliciting U.S. customers without registering as a money-transmitting business with the U.S. Treasury or futures commission merchant with the Commodities and Futures Trading Commission (CFTC). They also said that KuCoin failed to maintain adequate customer identity verification processes and allowed illicit funds to pass through its platform.
KuCoin was criminally charged along with the exchange’s founders, Chun Gan and Ke Tang. The two Chinese nationals were each charged with one count of conspiring to violate the Bank Secrecy Act and one count of conspiring to operate an unlicensed money-transmitting business. They remain at large.
- KuCoin is one of the top-ten crypto exchanges by trading volume. Prosecutors claim the platform received over $5bn and sent over $4bn of “suspicious and criminal funds.”
- The CFTC also unveiled separate civil charges against KuCoin, accusing the company of operating an unlicensed derivatives exchange.
The U.S. Justice Department, particularly the Southern District of New York court, has filed numerous criminal charges against crypto exchanges and their executives. The Southern District court filed criminal charges against disgraced FTX founder Sam Bankman-Fried, cryptocurrency mixer Tornado Cash and its founders, and Celsius co-founder Alex Mashinsky, among others.
Binance, the world’s biggest crypto exchange by trading volume, and its founder, Changpeng Zhao, recently pled guilty to similar charges as KuCoin’s. Binance agreed to pay a $4.3bn fine, and Zhao awaits sentencing after pleading guilty to violating the Bank Secrecy Act by failing to maintain an effective anti-money laundering program.
Last December, KuCoin agreed to pay a $22mn penalty in a case filed by the Attorney General of New York State. It admitted operating illegally in New York and agreed to cease operations in the state. Federal prosecutors soon filed the fresh criminal case against Seychelles-based KuCoin.
