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The Southern District of New York has announced charges against the global cryptocurrency exchange Kucoin and its founders for major violations of U.S. anti-money laundering laws.
Kucoin Faces Legal Firestorm for Alleged Anti-Money Laundering Failures
Damian Williams, the United States Attorney for the Southern District of New York, detailed the charges against Kucoin, accusing the platform and its founders, Chun Gan and Ke Tang, of operating without proper anti-money laundering protocols.
Williams stated, “As today’s Indictment alleges, Kucoin and its founders deliberately sought to conceal the fact that substantial numbers of U.S. users were trading on Kucoin’s platform … But financial institutions like Kucoin that take advantage of the unique opportunities available in the United States must also comply with U.S. law to help identify and drive out crime and corrupt financing schemes. Kucoin allegedly deliberately chose not to do so.”
The indictment points to an ostensible oversight in Kucoin’s operations, highlighting the exchange’s alleged failure to implement basic anti-money laundering policies, allowing it to be used as a haven for illicit funds. Despite being one of the world’s largest cryptocurrency exchanges with a vast U.S. customer base, Kucoin, along with its founders, is accused of skirting crucial U.S. banking secrecy and money transmission laws.
Investigations revealed that Kucoin’s operations allowed over $5 billion of suspicious and criminal funds to flow through the exchange, facilitated by its lack of a proper know-your-customer (KYC) process. The platform only introduced a KYC program in July 2023, following a criminal investigation, a move the U.S. Department of Justice subsequently criticized for its limited scope and delayed implementation.
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