The indictment alleges that KuCoin and its founders violated the Bank Secrecy Act by failing to maintain an adequate anti-money laundering program. This allowed KuCoin to serve as"a haven for illicit money laundering." For instance, the exchange was used for laundering the proceeds of a wire fraud scheme that had operated over a period from 2020 to about 2022. The exchange also received more than $3 million from sanctioned mixer Tornado Cash.
U.S. Attorney Damian Williams noted that KuCoin had deliberately concealed the fact that a significant number of U.S. users were trading on its platform. Despite its size and global reach, KuCoin allegedly chose not to comply with U.S. law.According to the allegations outlined in the DOJ's indictment, KuCoin actively prevented its U.S. customers from identifying themselves as such. Moreover, it misled investors about its customer base.
Notably, the U.S. accounted for 17% of the exchange's total customer base and nearly a fifth of traffic on the KuCoin's website. failed to register as a Futures Commission Merchants with the Commodity Futures Trading Commission despite operating as a derivatives exchange. Moreover, it did not register with FinCEN as a money transmitting business.
Gan and Tang, who are both citizens of China, are now facing charges carrying a maximum sentence of five years in prison.Alex Dovbnya is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets.
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