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The US government has accused crypto exchange KuCoin and two founders of violating anti-money laundering laws.
KuCoin founders Chun Gan and Ke Tang were each charged with one count of conspiracy to violate the US Bank Secrecy Act and one count of conspiracy to operate an unlicensed money transmitting business.
Neither have been arrested, according to the US Department of Justice.
“As today’s indictment alleges, KuCoin and its founders deliberately sought to conceal the fact that substantial numbers of US users were trading on KuCoin’s platform,” US Attorney Damian Williams said in a statement.
Read more: Former government officials say DAAMLA could harm US crypto industry
By skirting AML policies, the DOJ alleged, KuCoin was able to transmit more than $4 billion of “suspicious and criminal funds” and received $5 billion from operating “in the shadows of the financial markets.”
The DOJ said that KuCoin, Gan and Tang “affirmatively attempted to conceal the existence of KuCoin’s US customers in order to make it appear as if KuCoin was exempt from US AML and KYC [know-your-customer] requirements.”
US customers were allegedly “actively prevented” from identifying themselves when they opened accounts.
“Indeed, until at least July 2023, KuCoin did not require customers to provide any identifying information. It was only in July 2023, after KuCoin was notified of a federal criminal investigation into its activities, that KuCoin belatedly adopted a KYC program for new customers,” the DOJ said.
Last December, KuCoin settled with the New York Attorney General for $22 million and announced that it would stop operating in New York after it was accused of not properly registering with the state. $16.7 million of the payment went to refunds for New York customers.
The Tuesday action against KuCoin marks the first time that the DOJ has targeted a crypto exchange since it announced a multi-billion dollar settlement with Binance late last year.
As part of its settlement, former CEO Changpeng Zhao stepped down and is set to be sentenced next month. Binance was also accused of AML violations.