Cryptocurrency giant Kucoin accused of massively laundering criminal funds

Founded in 2017, Kucoin is accused by American justice of being a haven for money laundering, having transported $9 billion in “suspicious and criminal” funds.

Kucoin, the crypto exchange with 30 million customers, is in the sights of American justice. This Tuesday, the United States Attorney’s Office for the Southern District of New York criminally charged Kucoin with “violation of the Bank Secrecy Act and offenses related to the transfer of money without a license”, according to a press release Press.

Launched in 2017, Kucoin attracted U.S. customers without obtaining licenses from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the Commodity Futures Trading Commission (CFTC), a U.S. regulator. Its American customers could register without carrying out an identity verification process (KYC for “Know Your Customer”) to combat money laundering.

The company is accused of being a “safe haven” for illicit money laundering, with Kucoin “receiving over $5 billion and sending over $4 billion in suspicious and criminal funds,” the statement said. It was only after being informed of a federal investigation against it that Kucoin implemented KYC in July 2023… only for its new customers.

“Many of Kucoin’s clients used its trading platform specifically because of the anonymity of the services it provided. In other words, its no-KYC policy was integral to its growth and success,” can -we read.

Its two founders, Chun Gan and Ke Tang, now at liberty, face sentences of up to 5 years in prison. For the moment, it is only an accusation, the accused being “presumed innocent until proven guilty”, concludes the press release.

Pending Withdrawals

On Tuesday, Kucoin assured on the social network

“Many users have indicated that their withdrawals from Kucoin remain pending, sometimes for more than an hour. Note that this could be a simple congestion resulting from the announcement of the American justice, and that the funds of users are not necessarily at risk”, however, underlines the media Cryptoast.

While the crypto exchange Binance had to pay more than $4.3 billion to end an investigation by the American justice system, Kucoin is far from having finished with the American authorities.