US Indicts KuCoin Founders for AML Violations and Conspiracy

The United States Department of Justice has charged the cryptocurrency exchange KuCoin and two of its founders, Chun Gan and Ke Tang, with conspiracy to operate an unlicensed money transmitting business and failing to comply with the Bank Secrecy Act (BSA). According to the indictment, KuCoin did not implement an effective Anti-Money Laundering (AML) program, which is alleged to have allowed the platform to be used for money laundering and terrorist financing. The founders are accused of deliberately concealing a significant number of U.S. users on the platform, despite a large customer base in the U.K.

Alongside the charges against KuCoin and its founders, other associated companies such as Flashdot Limited, Peken Global Limited, and Phoenixfin Private Limited were also implicated. U.S. Attorney Damian Williams emphasized that KuCoin operated "in the shadows of the financial markets," enabling illicit financial activities. Both founders, citizens of China, are facing charges that could result in a maximum of five years in prison if convicted.

In response to the charges, the US Commodity Futures Trading Commission (CFTC) has also filed a lawsuit. The allegations highlight the U.S. authorities' commitment to enforcing compliance with financial regulations within the cryptocurrency market. The indictment and legal actions serve as a reminder to other cryptocurrency exchanges of the necessity to adhere to U.S. laws, including AML regulations and the BSA.