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KuCoin Founders Charged with AML and Bank Secrecy Act Violations in US



Table of Contents

  • The US Department of Justice has unsealed an indictment against KuCoin and founders Chun Gan and Ke Tang for money laundering and Bank Secrecy Act violations.
  • KuCoin is accused of deliberately flouting US AML regulations to attract US customers, resulting in billions of dollars in illicit funds being processed.
  • The charges underscore the growing scrutiny of cryptocurrency exchanges and the importance of compliance with financial regulations.

KuCoin, one of the world’s largest crypto exchanges, has taken a huge hit from the US Department of Justice (DOJ), as a newly sealed indictment has the company and two of its founders charged with some serious financial crimes. Based on the indictment and an accompanying press release from the DOJ, it is alleged that KuCoin, Chun Gan, and Ke Tang operated an unlicensed money transmitting business and willfully violated the Bank Secrecy Act designed to prevent money laundering.


Details of the Charges

According to the DOJ’s press release, KuCoin actively solicited US customers despite lacking the necessary licenses and compliance measures. The exchange allegedly failed to implement a Know-Your-Customer (KYC) program until July 2023, allowing customers to trade anonymously until very recently.

Read: KuCoin Exchange Review

It is said that KuCoin only “belatedly” adopted a KYC program for its newest customers after being notified of a federal crime investigation into its activities by July 2023. Through all the time since its founding date, the exchanged allegedly never filed any required suspicious activity reports, never registered with the CFTC as a futures commission merchant, and never registered with FinCEN as a money transmitting business.

The crypto exchange’s lax approach allegedly enabled its management to launder over $5 billion in criminal proceeds since the day of its founding.

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KuCoin’s Deliberate Actions

The indictment paints a picture of deliberate attempts by KuCoin and its founders to circumvent US regulations. They allegedly misled investors about the presence of US customers and actively marketed the exchange’s lack of KYC requirements to attract users seeking anonymity.

Exchanges operating within US jurisdiction must comply with existing financial laws or face potential legal consequences. This case serves as a stark reminder of the risks associated with non-compliant platforms and the importance of due diligence for cryptocurrency investors.

After the charges dropped, KuCoin’s exchange saw a massive outflow of assets worth more than $1.1 billion. So far, the exchange has assured users that there still isn’t any cause for alarm, and in fact, they have announcement a new airdrop program to thank its users for “continued support.”

With that said, time will tell whether KuCoin manages to weather this current storm and continues operations. KuCoin users may want to check out some worthy alternative cryptocurrency exchanges in the meantime.


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