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According to a recent announcement, an indictment has been issued against KuCoin and two of its founders, Chun Gan and Ke Tang. During this process, it was stated that KuCoin violated some US Anti-Money Laundering Laws in order to become one of the world’s largest cryptocurrency exchanges.
KuCoin Faces Charges and Legal Action
Damian Williams, the United States Attorney for the Southern District of New York, and Darren McCormack, the Acting Special Agent in Charge of the Homeland Security Investigations (“HSI”) New York Field Office, announced today that an indictment has been prepared against KuCoin and two of its founders, CHUN GAN and KE TANG.
The indictment includes several accusations, such as operating without a license in the money transmission process due to not working in compliance with an adequate anti-money laundering (“AML”) program created to restrict the use of money laundering and terrorist financing, failing to implement necessary procedures in the customer identity verification process, and not reporting any suspicious activities.
On the other hand, a lawsuit has also been filed against KuCoin Exchange by the US Commodity Futures Trading Commission in the past few minutes.
Prosecutor Clarifies the Situation
Following these events, US Attorney Damian Williams made a statement regarding the matter:
As alleged in today’s indictment, KuCoin and its founders have intentionally tried to conceal the fact that a significant number of US users were trading on KuCoin’s platform.
Indeed, it is claimed that KuCoin has benefited from its substantial US customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, with daily billions of dollars in transactions and annual trillions of dollars in trading volume.
However, financial institutions like KuCoin that benefit from unique opportunities in the United States must also comply with US laws to help identify and eliminate crime and corruption financing schemes.
It is alleged that KuCoin intentionally chose not to do this. The defendants, who are accused of not even implementing basic anti-money laundering policies, have allowed KuCoin to operate in the shadows of the financial markets and to be used as a haven for illegal money laundering, with KuCoin receiving over 5 billion dollars and sending over 4 billion dollars of suspicious and criminal funds.
Crypto exchanges like KuCoin cannot have it both ways. Today’s indictment should send a clear message to other crypto exchanges: If you plan to serve US customers, you must comply with US laws, plain and simple.
