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Reported by The Block, the Department of Justice lodged charges against crypto exchange KuCoin and two of its founders, alleging they violated anti-money laundering laws.
The DOJ unveiled the indictment on Tuesday against KuCoin and two of its founders Chun Gan and Ke Tang over charges related to operating an unlicensed money-transmitting business and and violating the Bank Secrecy Act. The Department says the exchange failed to maintain an adequate anti-money laundering program and failed to have "reasonable procedures" in place to confirm customers' identities and also failed to file suspicious activity reports.
The indictment said that KuCoin deliberately avoided U.S. AML and KYC regulations by "falsely representing that it had no U.S. customers when, in truth, KuCoin had a substantial U.S. customer base." The government claims KuCoin allowed its platform to be used for laundering over $9 billion.
"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," said the U.S. Attorney for the Southern District of New York Damian Williams in a <a rel="noopener noreferrer nofollow" target="_blank" href="https://www.justice.gov/usao-sdny/pr/prominent-global-cryptocurrency-exchange-kucoin-and-two-its-founders-criminally">statement</a>. "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."
The Commodity Futures Trading Commission also filed a parallel civil action on Tuesday against KuCoin, the DOJ said.
In a post on X, KuCoin CEO Johnny Lyu said he was aware of the charges but that the exchange has not been affected.
"While we’re working on it, the platform is unaffected and operating normally as usual," Lyu said. "Your assets are safe and sound with us. Our team and I will provide timely updates about the progress."
The DOJ said the founders, Gan and Tang, remain at large. The charges against Gan and Tang — conspiring to violate the Bank Secrecy Act and conspiring to operate an unlicensed money-transmitting business — each carry a maximum sentence of five years in prison.

The U.S. DOJ Charges Against KuCoin and its Founders

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