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KuCoin Crypto Exchange and Founders Charged by DOJ for $9B Laundering, Anti-Money Laundering Violations

Source: KuCoin

Crypto exchange KuCoin and two of its founders just got charged by US authorities for operating as an illegal exchange in the USA, as well as for failing to implement anti-money laundering protocols.

The Department of Justice (DoJ) charged KuCoin and two of its founders Chun Gan and Ke Tang with violating the Bank Secrecy Act and operating as an unlicensed money transmitter business.

❖ PROMINENT GLOBAL CRYPTOCURRENCY EXCHANGE KUCOIN AND TWO OF ITS FOUNDERS CRIMINALLY CHARGED WITH BANK SECRECY ACT AND UNLICENSED MONEY TRANSMISSION OFFENSES: DOJ

— *Walter Bloomberg (@DeItaone) March 26, 2024

As per the DoJ’s claim, KuCoin didn’t implement any know-your-customer (KYC) or anti-money laundering controls until 2023. Even then, these controls didn’t apply to existing customers.

The lack of controls allowed more than $9 billion in suspicious transactions to take place.

KuCoin and its founders, Chun Gan and Ke Tang, have been charged by the DOJ.

Why? For operating without a license and violating the Bank Secrecy Act.

So? $9 billion in suspicious transactions allegedly resulted from the lack of anti-money laundering (AML) measures.

— Ariel Givner, Esq. (@GivnerAriel) March 26, 2024

The Commodity Futures and Trade Commission (CFTC) also charged KuCoin with multiple violations of the Commodity Exchange Act.

The CFTC is seeking to impose fines and trading bans. The DoJ is seeking forfeiture and to pursue criminal penalties.

US Attorney Damien Williams said KuCoin tried to hide that it was being used by “substantial numbers of U.S. users”.

“In failing to implement even basic anti-money laundering policies, the defendants allowed KuCoin to operate in the shadows of the financial markets and be used as a haven for illicit money laundering, with KuCoin receiving over $5 billion and sending over $4 billion of suspicious and criminal funds”.

CFTC Hits Back At SEC’s Claim That Ether (ETH) Is a Commodity


Tuesday dual action against KuCoin by the DoJ and CFTC comes a few months after US regulators settled similar charges against Binance.

And nestled into its lawsuit against KuCoin, the CFTC is once again staking its claim to regulatory authority over Ether.

“During the Relevant Period, KuCoin solicited and accepted orders…involving digital assets that are commodities including bitcoin (BTC), ether (ETH), and litecoin (LTC)”, the CFTC said.

“During the Relevant Period, KuCoin solicited and accepted orders…involving digital assets that are commodities including bitcoin (BTC), ether (ETH), and litecoin (LTC).”@CFTC shots fired in wake of reports of @SECGov’s ETH-as-security investigation from last week pic.twitter.com/nYN0KWg1Iy

— Alexander Grieve (@AlexanderGrieve) March 26, 2024

That statement comes after news broke last week that the SEC is campaigning to classify ETH as a security.

That news only had a short-lived impact on the Ether price.

ETH dipped to just above $3,000 last week. But it has since recovered to above $3,500.

That’s helped in part by a broad crypto market rally that has seen Bitcoin retake $70,000. But its also helped by BlackRock’s first foray into the asset tokenization world.

The world’s largest asset manager just launched its first tokenized money market fund BUIDL on Ethereum.

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