U.S charges crypto exchange KuCoin with violating anti-money laundering laws

U.S. federal prosecutors have charged crypto exchange KuCoin and two of its founders with violating anti-money laundering laws.

The prosecutors allege that the exchange lied to at least one of its investors about operating in the U.S. and failed to both register with U.S. government entities and maintain an anti-money laundering program.

The U.S. Department of Justice (DOJ) claim that KuCoin and founders Chun Gan and Ke Tang operated KuCoin as a money-transmitting business with over 30 million customers but did not implement a know-your-customer (KYC) or AML program until 2023.

The DOJ indictment said that KuCoin did not register with the U.S. Financial Crimes Enforcement Network as a money services business, and “made itself available to be used, and in fact was used, as a vehicle for laundering the proceeds of suspicious and criminal activities, including proceeds from sanctions violations, darknet markets, and malware, ransomware, and fraud schemes.”

The indictment also allege that KuCoin “indirectly received a total of more than $3.2 million worth of cryptocurrency from Tornado Cash,” a sanctioned crypto mixer.

The Commodity Futures Trading Commission also filed a suit against KuCoin Tuesday, alleging that the company did not register as a futures commission merchant, swap execution facility or designated contract market.

KuCoin’s native token (KCS) dropped by 5% following the announcement.

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