The U.S. Department of Justice (DOJ) and the Commodities Futures Trading Commission (CFTC) have announced the unsealing of an indictment against crypto exchange KuCoin and two of its founders.
In a statement from the U.S. Attorney’s Office in the Southern District of New York, U.S. Attorney Damian Williams and Darren McCormack, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), say that Kucoin, along with founder Chun Gan and Ke Tang, conspired to commit several violations of the Bank Secrecy Act.
The government says that the duo created an “unlicensed money transmitting business” and failed to maintain an adequate anti-money laundering (“AML”) program, failed to properly verify the identity of their customers, and failed to file suspicious activity reports.
Attorney Williams says that the exchange and its founders “deliberately sought to conceal the fact that substantial numbers of U.S. users were trading on KuCoin’s platform.”
“Indeed, KuCoin allegedly took advantage of its sizeable U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, with billions of dollars of daily trades and trillions of dollars of annual trade volume.
But financial institutions like KuCoin that take advantage of the unique opportunities available in the United States must also comply with U.S. law to help identify and drive out crime and corrupt financing schemes. KuCoin allegedly deliberately chose not to do so.”
Williams also alleges that that KuCoin received over $5 billion, and sent over $4 billion in “suspicious and criminal funds.”
Darren McCormack described KuCoin as an “alleged multibillion-dollar criminal conspiracy.”
Gan and Tang are each being charged with one count of conspiring to violate the Bank Secrecy Act and one count of conspiring to operate an unlicensed money-transmitting business, each of which carries a maximum sentence of five years in prison.
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