worldcoinindex.com
U.S. federal prosecutors have brought charges against the cryptocurrency exchange KuCoin and two of its founders for allegedly violating anti-money laundering laws. The charges accuse KuCoin of operating within the U.S. while deceiving investors about its presence there, failing to register with U.S. authorities, and neglecting to establish an anti-money laundering (AML) program.
According to the U.S. Department of Justice, an indictment reveals that KuCoin, along with founders Chun Gan and Ke Tang, ran the exchange as a money-transmitting business with a customer base exceeding 30 million. However, the indictment alleges that KuCoin did not implement a know-your-customer (KYC) or AML program until 2023, and even then, the KYC measures did not extend to existing customers. Neither Gan nor Tang have been arrested, as stated by the DOJ.
The indictment highlights KuCoin's failure to register with the U.S. Financial Crimes Enforcement Network as a money services business. Due to the absence of KYC or AML protocols, KuCoin allegedly facilitated the laundering of proceeds from illicit activities, including sanctions violations, darknet markets, and various fraud schemes.
Additionally, the indictment implicates KuCoin in indirectly receiving more than $3.2 million worth of cryptocurrency from Tornado Cash, a sanctioned crypto mixer. KuCoin's involvement emerged in criminal cases against two developers associated with Tornado Cash, Alexey Pertsev and Roman Storm.
In a separate legal action, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against KuCoin, accusing the exchange of failing to register as a futures commission merchant or implement the CFTC's equivalent of a KYC program. The CFTC seeks monetary penalties, trading and registration bans, and an injunction, while the DOJ aims for forfeiture and criminal penalties.
Homeland Security Investigations Special Agent in Charge Darren McCormack described KuCoin as an "alleged multibillion-dollar criminal conspiracy," emphasizing its status as one of the largest crypto exchanges. U.S. Attorney Damien Williams highlighted KuCoin's attempts to conceal the significant number of U.S. users trading on its platform.
The indictment alleges that KuCoin allowed illicit money laundering activities to flourish by neglecting basic AML policies, resulting in the exchange handling over $5 billion in suspicious and criminal funds.
Following the announcement, KuCoin's native token (KCS) experienced a 5% drop, while Bitcoin's (BTC) price dipped 1% amid volatility, currently trading around $70,000.
These charges against KuCoin come shortly after similar allegations were settled with Binance, the world's largest cryptocurrency exchange by trading volume, by the DOJ, CFTC, and Treasury Department.