KuCoin Founders Accused of Flouting U.S. Money Laundering Laws

KuCoin and its founders, Chun Gan and Ke Tang, are accused of violating U.S. anti-money laundering laws, growing the exchange into one of the world’s largest cryptocurrency platforms. The indictment, announced by U.S. Attorney Damian Williams and HSI Acting Special Agent Darren McCormack, alleges that KuCoin operated without a license, failed to implement adequate anti-money laundering measures, and neglected customer identity verification.

Williams stated that KuCoin knowingly catered to U.S. customers while avoiding compliance with U.S. laws, allowing it to become a hub for illicit money laundering, with billions in suspicious transactions. He emphasized that cryptocurrency exchanges must adhere to U.S. regulations if serving U.S. customers.

McCormack described KuCoin as a multibillion-dollar criminal enterprise that flouted essential laws, commending the investigative efforts that led to the indictment.

The indictment alleges that KuCoin actively solicited U.S. customers without proper registration, failing to implement necessary anti-money laundering procedures. Despite being aware of their obligations, KuCoin’s founders intentionally evaded requirements, even attempting to conceal U.S. customers’ existence. KuCoin’s lax policies facilitated the laundering of criminal proceeds, including funds from darknet markets and fraud schemes.

Gan and Tang, both Chinese citizens, face charges including conspiring to violate the Bank Secrecy Act and operating an unlicensed money transmitting business. Flashdot Limited, Peken Global Limited, and Phoenixfin Private Limited, collectively known as KuCoin, also face charges related to violating anti-money laundering laws.

The case, handled by the Illicit Finance & Money Laundering Unit, involves parallel civil action by the Commodity Futures Trading Commission. The indictment serves as an accusation, and the defendants are presumed innocent until proven guilty.