DOJ Alleges $9 Billion Laundering Scheme in Charges Against KuCoin

BySamson Ononeme

Mar 26, 2024 ,
U.S prosecutors have unveiled charges accusing major cryptocurrency exchange KuCoin of willfully violating anti-money laundering laws in a $9 billion scheme.

Key Insights

  • The U.S. DoJ has charged KuCoin and two founders with operating an unlicensed money transmission business and violating AML laws
  • Prosecutors allege KuCoin facilitated over $9 billion in money laundering
  • The CFTC also filed a parallel civil enforcement action against KuCoin

NEW YORK (MarketsXplora) – The U.S. Department of Justice unveiled an indictment on Tuesday accusing major cryptocurrency exchange KuCoin of facilitating the laundering of over $9 billion while willfully failing to maintain an adequate anti-money laundering program.

Charges were filed in federal court in Manhattan against the Seychelles-based KuCoin platform as well as founders Chun Gan and Ke Tang for operating an unlicensed money transmitting business and violating U.S. banking secrecy laws.

Prosecutors allege KuCoin falsely claimed it had no customers in the United States, while in reality allowing a “substantial” American user base to access the exchange and conduct over $9 billion worth of illicit transactions.

“KuCoin allegedly took advantage of its sizable U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges,” U.S. Attorney Damian Williams said in a statement.

Williams added KuCoin “deliberately chose” not to comply with U.S. anti-money laundering (AML) and know-your-customer (KYC) rules requiring customer verification and suspicious activity reporting.

The indictment accuses KuCoin of lacking reasonable procedures to confirm user identities and failing to maintain required AML safeguards. This allegedly enabled criminals and rogue states to launder funds through the platform.

KuCoin is one of the world’s largest crypto trading platforms, facilitating billions of dollars in daily transaction volumes across derivatives and spot markets for digital assets like bitcoin.

The charges represent one of the U.S. government’s biggest enforcement actions yet against the cryptocurrency industry over money laundering concerns.

Separately on Tuesday, the Commodity Futures Trading Commission announced a parallel civil lawsuit against KuCoin over the alleged violations, the Justice Department said.

KuCoin did not immediately respond to a request for comment. The exchange had previously disclosed a federal probe into potential violations.

Samson Ononeme

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