US federal prosecutors announced charges against crypto
exchange KuCoin and two of its founders for allegedly violating anti-money
laundering (AML) laws today (Tuesday). According to the indictment, KuCoin
operated in the US without proper registration and failed to maintain an
adequate AML program.
The indictment, brought forth by the US Department of
Justice (DOJ), accuses KuCoin and its founders, Chun Gan and Ke Tang, of
running a money-transmitting business serving over 30 million customers without
implementing a know-your-customer (KYC) or AML program until 2023. It was noted
that even after the implementation of a KYC program, existing customers were
not subject to its requirements. Despite these allegations, neither Gan nor
Tang has been arrested, the DOJ clarified in a press release.
Furthermore, the indictment claims that KuCoin did not register
with the US Financial Crimes Enforcement Network as a money services business,
as required by law. Prosecutors argue that this failure to implement adequate
AML measures allowed KuCoin to be exploited for money laundering activities,
including those related to sanctions violations, darknet markets, and various
fraudulent schemes.
DOJ and CFTC Pursue Penalties
The indictment also alleges KuCoin’s involvement in
receiving cryptocurrency from Tornado Cash, a sanctioned crypto mixer, totaling
over $3.2 million. This connection was highlighted in criminal filings against
developers associated with Tornado Cash.
JUST IN: KuCoin exchange founders charged with conspiring to operate an unlicensed money transmitting business and conspiring to violate the Bank Secrecy Act by willfully failing to maintain an adequate anti-money laundering (“AML”) program 👀 pic.twitter.com/hBEnwHnUNt
— Bitcoin News (@BitcoinNewsCom) March 26, 2024
In addition to the DOJ’s charges, 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
required KYC program. The CFTC seeks monetary penalties, trading and
registration bans, as well as an injunction against KuCoin.
DOJ charges KuCoin with AML/KYC violations. Government alleges KuCoin failed to enforce KYC restrictions to block US users. The assault on VPNs has begun. pic.twitter.com/wpTRA8fn2Z
— Carlo⚖️.eth (@DeFiDefenseLaw) March 26, 2024
Both the DOJ and the CFTC are pursuing legal action against
KuCoin, aiming for forfeiture and criminal penalties in the case brought forth
by the DOJ and monetary penalties and regulatory measures through the CFTC’s
lawsuit. KuCoin has yet to publicly respond to these charges.
US federal prosecutors announced charges against crypto
exchange KuCoin and two of its founders for allegedly violating anti-money
laundering (AML) laws today (Tuesday). According to the indictment, KuCoin
operated in the US without proper registration and failed to maintain an
adequate AML program.
The indictment, brought forth by the US Department of
Justice (DOJ), accuses KuCoin and its founders, Chun Gan and Ke Tang, of
running a money-transmitting business serving over 30 million customers without
implementing a know-your-customer (KYC) or AML program until 2023. It was noted
that even after the implementation of a KYC program, existing customers were
not subject to its requirements. Despite these allegations, neither Gan nor
Tang has been arrested, the DOJ clarified in a press release.
Furthermore, the indictment claims that KuCoin did not register
with the US Financial Crimes Enforcement Network as a money services business,
as required by law. Prosecutors argue that this failure to implement adequate
AML measures allowed KuCoin to be exploited for money laundering activities,
including those related to sanctions violations, darknet markets, and various
fraudulent schemes.
DOJ and CFTC Pursue Penalties
The indictment also alleges KuCoin’s involvement in
receiving cryptocurrency from Tornado Cash, a sanctioned crypto mixer, totaling
over $3.2 million. This connection was highlighted in criminal filings against
developers associated with Tornado Cash.
JUST IN: KuCoin exchange founders charged with conspiring to operate an unlicensed money transmitting business and conspiring to violate the Bank Secrecy Act by willfully failing to maintain an adequate anti-money laundering (“AML”) program 👀 pic.twitter.com/hBEnwHnUNt
— Bitcoin News (@BitcoinNewsCom) March 26, 2024
In addition to the DOJ’s charges, 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
required KYC program. The CFTC seeks monetary penalties, trading and
registration bans, as well as an injunction against KuCoin.
DOJ charges KuCoin with AML/KYC violations. Government alleges KuCoin failed to enforce KYC restrictions to block US users. The assault on VPNs has begun. pic.twitter.com/wpTRA8fn2Z
— Carlo⚖️.eth (@DeFiDefenseLaw) March 26, 2024
Both the DOJ and the CFTC are pursuing legal action against
KuCoin, aiming for forfeiture and criminal penalties in the case brought forth
by the DOJ and monetary penalties and regulatory measures through the CFTC’s
lawsuit. KuCoin has yet to publicly respond to these charges.
