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The US charged crypto exchange KuCoin and its founders, Chun Gan and Ke Tang, with orchestrating a multibillion-dollar criminal conspiracy.
This indictment accuses the parties of operating without a license and flouting anti-money laundering laws to cement KuCoin’s status.
KuCoin’s Alleged Multibillion-Dollar Criminal Plot
According to the official statement, KuCoin and its founders failed to establish a robust anti-money laundering program. The crypto exchange also neglected to verify customer identities and did not file any reports of suspicious activities.
This lapse in protocol has allegedly positioned KuCoin as a conduit for illicit financial flows. These include money from darknet markets and various fraud schemes, tallying over $9 billion in suspicious transactions. Moreover, the indictment details how KuCoin exploited its significant US customer base to scale into a global trading powerhouse.
“Today, we exposed one of the largest global cryptocurrency exchanges for what our investigation has found it to truly be: an alleged multibillion-dollar criminal conspiracy. KuCoin grew to service over 30 million customers, despite its alleged failure to follow laws necessary to ensuring the security and stability of our world’s digital banking infrastructure,” HSI Acting Special Agent in Charge Darren McCormack said.
The disregard for US laws aimed at combating financial crimes and corruption underpins the charges against the KuCoin and its executives, who remain at large.
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Founded in September 2017, KuCoin quickly ascended the ranks to become a top crypto exchange, boasting billions in daily trading volume. Despite its success, the indictment alleges the firm and its founders consciously evaded US regulations. Specifically, those requiring registration with financial oversight bodies like the Financial Crimes Enforcement Network (FinCEN) and the Commodity and Futures Trading Commission (CFTC).
“As alleged, in failing to implement even basic anti-money laundering policies, the defendants allowed KuCoin to operate in the shadows of the financial markets and be used as a haven for illicit money laundering, with KuCoin receiving over $5 billion and sending over $4 billion of suspicious and criminal funds,” US Attorney Damian Williams said.
The charges against the exchange and its founders are significant, marking a decisive step by US authorities to clamp down on illicit activities within the cryptocurrency market. Chun Gan and Ke Tang face substantial prison sentences if convicted, reflecting the serious nature of their alleged offenses.
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This case serves as a stark reminder to other crypto exchanges and financial institutions of the imperative to comply with US laws. It also emphasizes the country’s commitment to ensuring the integrity of its financial markets against abuse by unregulated entities.