Key Takeaways

• Crypto exchange KuCoin and its founders were charged by US federal prosecutors for violating anti-money laundering (AML) laws. This includes operating in the US without proper registration and failing to implement KYC and AML programs until 2023.

• The US Department of Justice and the Commodity Futures Trading Commission (CFTC) filed suits against the exchange. The DOJ seeks forfeiture and criminal penalties, while the CFTC seeks monetary penalties, trading bans, and injunctions.

• These actions against KuCoin follow similar charges against Binance, highlighting increased regulatory scrutiny within the crypto industry.

The US Attorney’s Office for the Southern District of New York accused the cryptocurrency exchange KuCoin and its two founders of violating money transmission regulations and failing to comply with the Bank Secrecy Act.

KuCoin’s founders, Chun Gan, and Ke Tang, were accused of serious crimes after the US Attorney, Damian Williams, and Homeland Security Investigations’ Darren McCormack filed a complaint against them. The indictment alleges the pair conspired to operate an unlicensed money-transmitting business through KuCoin.

US Gov: KuCoin Disregarded The Bank Secrecy Act

Authorities allege that the individuals behind KuCoin willfully violated the Bank Secrecy Act by failing to implement sufficient safeguards against illegal activity on their platform. This includes neglecting to verify user identities and failing to monitor or report suspicious transactions, potentially facilitating money laundering and terrorist financing.

According to US Attorney Damian Williams, the indictment alleges that KuCoin has been catering to US customers since launching its spot and futures trading in July 2019. Notably, the platform lacked Know Your Customer (KYC) procedures until at least July 2023, reportedly implemented only after the exchange became aware of an investigation by US officials.

Notably, KuCoin CEO Johnny Lyu was not named in the lawsuit.

KuCoin Responds

In a public statement, KuCoin assured users that the platform is operating well and their assets remain secure. The company is currently collaborating with its legal team to investigate the situation and is committed to following international regulations and maintaining strict compliance standards.

About KuCoin

KuCoin is known as the “People’s Exchange” for its user-friendly interface and strong security features. The exchange boasts over 30 million users across 200+ countries and processes billions in daily trading volume.