On January 27, 2025, cryptocurrency exchange KuCoin admitted guilt to charges of operating an unlicensed money-transmitting business. Additionally, two of its co-founders, Chun Gan and Ke Tang, reached deferred prosecution agreements with the United States Department of Justice (DOJ).
KuCoin Pleads Guilty to U.S. DOJ’s Charges
The legal action stems from March 2024, when the U.S. Attorney’s Office for the Southern District of New York revealed an indictment against KuCoin and its co-founders. The indictment accused them of conspiring to operate an unregistered money-transmitting business and failing to comply with the Bank Secrecy Act (BSA) by neglecting to implement a sufficient anti-money laundering (AML) program. The crypto exchange also faced charges for substantive violations of the BSA.
According to the DOJ, KuCoin’s operations lacked essential mechanisms to prevent illegal activities such as money laundering and terrorist financing. The indictment alleged that the platform did not enforce adequate procedures for customer identity verification and failed to submit Suspicious Activity Reports. Investigators noted that KuCoin had no comprehensive compliance program under the BSA, claiming the company intentionally overlooked the presence of U.S.-based customers.
INTEL: KuCoin pleads guilty to U.S. charges of unlicensed money transmitting business
Two of its co-founders signed deferred prosecution agreements with the DOJ
— Solid Intel 📡 (@solidintel_x) January 27, 2025
The Commodity Futures Trading Commission (CFTC) also pursued legal action against the exchange on the same day, filing a separate complaint in federal court. The CFTC alleged that KuCoin breached the Commodity Exchange Act and associated regulations.
Impact On Broader Industry
These allegations mirror patterns observed in other enforcement actions targeting major cryptocurrency exchanges, including Binance. KuCoin’s alleged failure to establish an effective compliance system drew significant scrutiny, particularly in light of its claim to have no U.S.-based users.
The legal proceedings highlight ongoing regulatory challenges faced by crypto exchanges operating in the United States. Authorities have increasingly focused on ensuring compliance with anti-money laundering and customer verification standards to prevent misuse of digital asset platforms.
Also Read: MiCA Licenses Secured By OKX and Bitpanda, Boosts EU Crypto Market
Source: https://www.cryptonewsz.com/kucoin-pleads-guilty-unlicensed-money-business/