The U.S. Department of Justice alleges that KuCoin and its two founders were knowingly involved in money laundering.
The allegations suggest that the crypto exchange KuCoin engaged in activities that violated the Bank Secrecy Act and regulations concerning unlicensed money transmission. The U.S. Department of Justice (DOJ) emphasized that the exchange’s founders, Chun Gan and Ke Tang, tried to conceal the existence of its U.S. customers to bypass AML and KYC requirements.
The DOJ asserts that the exchange conducted operations without the necessary license for a money-transmitting business, constituting a clear breach of the Bank Secrecy Act. U.S. Attorney Damian Williams highlighted that KuCoin seemingly disregarded the country’s laws and regulations.
Williams pointed out that the exchange had processed transactions involving over $5 billion in potentially dubious and unlawful funds.
The KuCoin token’s (KCS) price dropped 5% immediately following the news.
Darren McCormack, the Deputy Special Agent in Charge for the U.S. Department of Homeland Security, emphasized the significance of the indictment. McCormack described KuCoin’s operations as an alleged criminal conspiracy on a massive scale, noting the exchange’s growth to serve over 30 million customers without adhering to legal standards critical for the safety and integrity of the global digital finance ecosystem.
Gan and Tang are both Chinese citizens and remain at large. The charges could see the founders and other related parties face up to 10 years in prison.