In a major crackdown on cryptocurrency exchanges, the U.S. Department of Justice (DOJ) has indicted global cryptocurrency exchange KuCoin and two of its founders, Chun Gan (also known as Michael) and Ke Tang (also known as Eric).
Today, March 26, 2024, Damian Williams, the United States Attorney for the Southern District of New York, together with Darren McCormack, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations, revealed the unsealing of an indictment targeting the exchange and two of its founders.
The charges allege KuCoin conspired to operate as an unlicensed money transmitter and violated the Bank Secrecy Act by failing to implement proper anti-money laundering (AML) protocols. These protocols are designed to prevent the exchange from being used for money laundering and terrorist financing.
Prosecutors further claim KuCoin lacked sufficient customer identification procedures and failed to report suspicious activity. The DOJ alleges KuCoin functioned as a haven for illicit funds, processing over $5 billion in transactions suspected to be illegal or linked to money laundering.
In other news, KuCoin halts services for New York users and pays $22M in fines.
Additionally, the indictment highlights KuCoin’s alleged receipt of over $3.2 million from Tornado Cash, a sanctioned cryptocurrency mixing service known to obfuscate transaction origins. This raises concerns about KuCoin’s potential role in facilitating illegal financial activities.
The Commodity Futures Trading Commission (CFTC) filed a separate lawsuit against KuCoin, accusing the exchange of offering illegal futures trading services without proper registration and failing to implement a Know Your Customer (KYC) program compliant with CFTC regulations.
While the founders remain at large, these indictments cast a dark shadow over KuCoin’s operations and raise serious questions about the exchange’s adherence to financial regulations in the United States.
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