KuCoin Founders Charged For Violating AML And Unlicensed Money Transmission Offenses

Key Points:

• KuCoin founders Chun Gan and Ke Tang are criminally charged with operating an unlicensed money-transmitting business and violating the Bank Secrecy Act.
• KuCoin allegedly concealed its substantial U.S. customer base while enjoying billions of dollars in daily trades.

In a significant development, the United States Attorney for the Southern District of New York, Damian Williams, alongside Darren McCormack, Acting Special Agent in Charge of Homeland Security Investigations (HSI), announced the unsealing of an indictment against KuCoin, a major global cryptocurrency exchange, and two of its founders, Chun Gan and Ke Tang.

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KuCoin Founders Face Criminal Charges

The charges include conspiring to operate an unlicensed money-transmitting business and violating the Bank Secrecy Act.

KuCoin, through its entities Flashdot Limited, Peken Global Limited, and Phoenixfin Private Limited, aggressively solicited business from U.S. customers, despite knowingly evading regulatory obligations. The exchange, boasting over 30 million customers globally, neglected basic anti-money laundering (AML) policies, allowing it to become a hub for illicit financial activities.

KuCoin founders face charges of a maximum sentence of five years in prison. The entities operating as KuCoin are also charged with various offenses, including operating an unlicensed money-transmitting business and violating the Bank Secrecy Act, potentially leading to substantial prison sentences.

U.S. Authorities Send a Warning to Crypto Exchanges

U.S. Attorney Damian Williams emphasized that KuCoin deliberately concealed its U.S. customer base while benefiting from significant trading volumes. He warned other crypto exchanges to adhere to U.S. law if they intend to serve American customers.

KuCoin’s willful disregard for AML and know-your-customer (KYC) procedures facilitated the laundering of billions in criminal proceeds. Despite its sizeable user base, KuCoin’s lax policies enabled anonymity, attracting customers seeking to avoid KYC requirements.

The charges against KuCoin founders underscore the importance of regulatory compliance in the cryptocurrency industry, sending a clear message to other exchanges operating in the United States.