By Dean Seal


The Justice Department unsealed on Tuesday an indictment charging cryptocurrency exchange KuCoin and two of its founders with violating anti-money laundering laws.

Federal prosecutors alleged that exchange founders Chun Gan and Ke Tang conspired to operate an unlicensed money-transmitting business and violate the Bank Secrecy Act by failing to maintain an adequate anti-money-laundering program that would have prevented KuCoin from being used for money laundering and terrorist financing.

Representatives for KuCoin said the company is aware of the charges and currently reviewing them with legal counsel.

"While we're working on it, the platform is unaffected and operating normally as usual," Chief Executive Johnny Lyu said in a post on X, formerly known as Twitter.

The indictment alleged KuCoin and the founders deliberately hid the fact that substantial numbers of U.S. users were trading on the platform, helping it become one of the world's largest cryptocurrency derivatives and spot exchanges without it ever establishing basic anti-money-laundering policies.

The government said KuCoin has received more than $5 billion and sent over $4 billion of suspicious and criminal funds since it was founded in 2017. It also alleged that the founders and the exchange failed to maintain reasonable procedures for verifying the identity of its customers, and never filed suspicious activity reports.

The founders haven't been arrested, according to the DOJ.

The Commodity Futures Trading Commission filed a parallel civil action against the exchange and its founders on Tuesday. It alleges they violated trader regulations and the Bank Secrecy Act.


Write to Dean Seal at dean.seal@wsj.com


(END) Dow Jones Newswires

03-26-24 1425ET