Founders Charged
The US Department of Justice (DOJ) has charged cryptocurrency exchange KuCoin and its founders, Chun Gan and Ke Tang, with violating anti-money laundering (AML) laws. The indictment alleges that they failed to implement proper AML measures, allowing the exchange to become a “hub for illicit money laundering.”
Failure to Comply with US Laws
According to the DOJ, KuCoin received and sent billions of dollars in suspicious funds without following basic AML policies. The exchange allegedly evaded registration requirements with US financial regulators, including the Treasury Department’s FinCEN and the Commodity and Futures Trading Commission (CFTC).
Lack of KYC Requirements
The indictment further claims that KuCoin did not have customer identification requirements until 2023 and that its KYC program only applied to new customers. This allowed millions of existing customers, including many in the US, to remain unchecked.
Concealment of US Customers
The DOJ alleges that KuCoin actively concealed the presence of US customers to avoid AML and KYC requirements. The exchange reportedly prevented US customers from identifying themselves during account registration.
Consequences
If convicted, Gan and Tang could face up to five years in prison for each count of conspiring to violate the Bank Secrecy Act and conspiring to operate an unlicensed money transmitting business. The news has had a significant impact on KuCoin’s native token, KCS, which has dropped by 10% since the charges were announced.
