Following the Binance path, the U.S. Attorney’s Office for the Southern District of New York, in conjunction with Homeland Security Investigations (HSI), has unveiled charges against the global crypto exchange KuCoin and its founders Chun Gan and Ke Tang, both Chinese nationals. The indictment, unsealed on March 26, 2024, accuses them of conspiring to violate the Bank Secrecy Act and operating an unlicensed money-transmitting business.

The indictment highlights that KuCoin, alongside Chun Gan (also known as “Michael”) and Ke Tang (also known as “Eric”), systematically avoided U.S. anti-money laundering laws to expand their operation into one of the largest cryptocurrency exchanges globally. This avoidance allegedly included failing to establish an adequate anti-money laundering program, neglecting to verify customer identities properly, and not filing any suspicious activity reports. Both Gan and Tang are currently at large.

#KuCoin is operating well, and the assets of our users are absolutely safe. We are aware of the related reports and are currently investigating the details through our lawyers. KuCoin respect the laws and regulations of various countries and strictly adheres to compliance standards.KUCOIN ON X (LINK)

U.S. Attorney Damian Williams emphasized that financial institutions leveraging the U.S. market’s opportunities must also adhere to its laws to prevent and combat financial crimes. He accused KuCoin and its founders of electing to bypass these crucial legal requirements, thereby allowing the platform to serve as a conduit for illicit money laundering, with over $5 billion received and more than $4 billion sent in suspicious and criminal funds.

The indictment describes KuCoin as a criminal conspiracy, underscoring its significant customer base and daily trading volumes despite alleged regulatory non-compliance. The charges stem from KuCoin‘s operation since its founding in September 2017, during which it purportedly solicited business from U.S. customers without the necessary registrations and compliance measures in place. This included a failure to implement Know Your Customer (KYC) protocols until July 2023 after being notified of a federal investigation.

Additionally, the indictment accuses KuCoin of attempting to conceal its U.S. customer base to evade AML and KYC obligations, misleading investors, and marketing its services to U.S. users as a no-KYC necessary platform.

The indictment carries serious potential penalties, including maximum sentences of up to 10 years in prison for substantive violations of the Bank Secrecy Act and 5 years for operating an unlicensed money transmitting business.

This case against KuCoin and its founders represents a critical juncture in the ongoing effort to regulate the cryptocurrency market and enforce compliance with U.S. financial laws. In light of these developments, our partner FinTelegram has initiated the #BinanceWatchdog initiative to expose any malpractices within the crypto exchange sector. We urge clients of Binance and other exchanges to join this initiative and report any wrongdoings, contributing to a more transparent and lawful cryptocurrency environment.

KuCoin Compliance Profile