The cryptocurrency exchange platform KuCoin and two of its founders are facing accusations of violating anti-money laundering laws by US federal prosecutors.
According to the indictment from the Department of Justice (DOJ), KuCoin and its founders Chun Gan and Ke Tang operated without registering with the US Financial Crimes Enforcement Network and failed to implement a program that complies with anti-money laundering requirements.
This lack of a Know Your Customer (KYC) or Anti-Money Laundering (AML) program until 2023 would have made KuCoin a potential conduit for money laundering from criminal activities, including those arising from sanctions violations, black markets, and various frauds.
The indictment also highlights suspicious transactions, including with sanctioned cryptocurrency mixer Tornado Cash, revealing weaknesses in financial flow controls. Meanwhile, the US Commodity Futures Trading Commission (CFTC) has also filed a lawsuit against KuCoin for failing to meet registration and regulatory compliance obligations.
KuCoin and its founders’ actions are described as a ‘multi-billion-dollar criminal conspiracy’ by Darren McCormack, special agent in charge of Homeland Security Investigations.
The immediate impact was also felt in the market, with a 12% drop in the native KuCoin token (KCS) and repercussions on the price of Bitcoin. These events come a few months after a similar settlement involving Binance, the world’s largest cryptocurrency exchange platform.
