NEW YORK (AP) โ A top U.S. prosecutor on Tuesday announced criminal charges against a once-successful cryptocurrency company and two of its founders, in an attempt to send a message to other industry players to Respect American laws.
US Attorney Damian Williams said the conspiracy charges against KuCoin and two executives should put other crypto exchanges on notice that they cannot serve US customers without following US laws. An indictment filed in federal court in Manhattan alleged that the company and its founders attempted to conceal the existence of its customer base in the United States.
In December, New York Attorney General Letitia James obtained a payment of more than $22 million from KuCoin to refund $16.7 million to more than 150,000 New York investors and provide the state of New York with more than 5.3 million dollars. KuCoin was also required to cease operations in New York after falsely representing itself as a crypto exchange without registering as a securities and commodities broker, James said.
Williams said in a statement that KuCoin, formed in 2017, โleveraged its significant US customer base to become one of the largest cryptocurrency derivatives and spot exchanges in the world, with billions of dollars in transactions.โ daily and billions of dollars in annual trade volume. "
He said the company deliberately chose to ignore US laws designed to help identify and root out crime and corrupt financing schemes on financial platforms. As a result, authorities said, the company was used as a vehicle to launder large sums of money from criminal malware, ransomware and fraud schemes.
KuCoin failed to implement even basic anti-money laundering policies, allowing clients to process more than $4 billion in suspicious and criminal funds while KuCoin operated in the shadows of financial markets and provided a haven for money laundering. illicit money, Williams said.
Darren McCormack, who heads New York's Homeland Security Investigations office, said prosecutors are exposing one of the world's largest cryptocurrency exchanges as a multibillion-dollar criminal conspiracy.
"KuCoin grew to serve more than 30 million customers, despite its alleged failure to comply with the laws necessary to ensure the security and stability of our world's digital banking infrastructure," McCormack said.
In a statement posted on social media, the company said it was "operating well and our users' assets are absolutely safe."
He added: โWe are aware of the related reports and are currently investigating the details through our lawyers. KuCoin respects the laws and regulations of various countries and strictly adheres to compliance standards.โ
Also on social media, the company's CEO, identifying himself as "Johnny," said that "the regulatory issue surrounding KuCoin has come to my attention." While we are working on it, the platform is not affected and works normally as usual. Your assets are safe and sound with us. Our team and I will provide timely updates on progress.โ
Charged along with the company were Chun Gan, 34, and Ke Tang, 39, two of the company's founders and both citizens of China. Charged with conspiring to violate the Bank Secrecy Act and conspiring to operate an unlicensed money transfer business, they remain at large.
The Bank Secrecy Act charge stemmed from the men's failure to maintain an adequate anti-money laundering program to prevent KuCoin from being used for money laundering and terrorist financing, as well as failing to verify customers and failing to file any suspicious activity reports common in the financial industry, prosecutors said.
Three companies operating as KuCoin were formed in the Cayman Islands, the Republic of Seychelles and Singapore. They also faced conspiracy charges.
On the KuCoin website on Tuesday, US residents were greeted with the following message: โBased on your IP address, we do not currently provide services in your country or region due to local laws, regulations or policies. We apologize for any inconvenience this may cause. If you are in a region where our services are available, please access our platform from a supported location to complete the KYC verification.โ
The company claims to have 30 million registered users in more than 200 countries and regions around the world.
