KuCoin Charged With Bank Secrecy Act, Money Laundering Violations

Table of Contents

• KuCoin, Founders Charged 
• A Major Oversight 
• KuCoin Responds 

KuCoin and its founders are facing a legal firestorm after the Southern District of New York announced charges for major US Anti-Money Laundering laws violations. 

KuCoin, one of the world’s largest cryptocurrency exchanges, and its founders, Chun Gan, and Ke Tang, have been accused of operating without adhering to proper anti-money laundering protocols. 

KuCoin, Founders Charged 

According to federal prosecutors, KuCoin violated US anti-money laundering laws by failing to vet customers and allowing billions of dollars in illicit funds to be transferred since its founding in 2017. They also argued that the Seychelles-based platform sought to engage US customers without registering with the United States Treasury Department. It also did not put in place any procedures to verify the identity of its clients, as mandated by US law. The United States Attorney for the Southern District of New York detailed the charges against the platform and its founders, stating, 

“As today’s Indictment alleges, KuCoin and its founders deliberately sought to conceal the fact that substantial numbers of US users were trading on KuCoin’s platform … But financial institutions like KuCoin that take advantage of the unique opportunities available in the United States must also comply with US law to help identify and drive out crime and corrupt financing schemes. KuCoin allegedly deliberately chose not to do so.”

The platform and its founders were also charged with failing to adhere to the Bank Secrecy Act and maintaining reasonable procedures for customer verification and monitoring of suspicious activities. 

A Major Oversight 

KuCoin’s indictment points to a considerable oversight in the exchange’s operations and highlights its failure to implement basic anti-money laundering policies and allow it to be used as a haven for illicit funds. Despite being one of the world’s largest crypto exchanges, KuCoin and its founders face serious charges related to money laundering, bank secrecy, and money transmission laws. 

During investigations, it was revealed that KuCoin reportedly allowed over $5 billion in suspicious and criminal funds to flow through the platform. This was facilitated by the lack of a proper know-your-customer (KYC) process. KuCoin introduced a KYC process in July 2023 following a criminal investigation. The US Department of Justice was extremely critical of the platform for the late implementation and limited scope of its KYC process. 

KuCoin Responds 

KuCoin responded to the developments in a post on X, assuring users that the platform is functioning normally and all user assets are safe. It further added that its lawyers are looking into the allegations. 

“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 respects the laws and regulations of various countries and strictly adheres to all compliance standards.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.