The US Department of Justice says it has shut down a cryptocurrency exchange operation believed to be trading billions per day in funds.
Authorities say that the KuCoin exchange allowed its users to move funds without asking questions or keeping any records as to where the money was coming or going. In short, the DOJ believes the operation could have been a haven for money laundering.
The site's two founders, Chun Gan and Ke Tang, were charged with conspiring to operate an unlicensed money transmitting business and failing to maintain records under anti money laundering laws. While the service itself has not been taken down, it is no longer available within the US.
As both Gan and Tang are Chinese citizens and remain at large, an arrest and court date seem unlikely to occur any time soon.
A bit of background: under US law, anyone operating a currency exchange within the US (or accepting US customers) is subject to the Treasury Department's Treasury's Financial Crimes Enforcement Network rules that include formally registering as an exchange and maintaining records that track where money is coming and going to help spot laundering schemes.
Though the exchange was first opened in 2017, it only began serving US customers in 2019. In that time, it has risen to become one of the most widely-used exchanges on the planet. According to the DOJ's indictment, at its peak the service was handling as much as $2.8bn worth of various currencies.
While most of that currency movement was thought to be on the level, the DOJ is convinced that a certain amount of it is not. Noting that because the service did not keep records a pinpoint figure is difficult to obtain, authorities estimate that the site received at least $5bn and trafficked out at least $4bn in illegal transactions.
"Financial institutions like KuCoin that take advantage of the unique opportunities available in the United States must also comply with US law to help identify and drive out crime and corrupt financing schemes. KuCoin allegedly deliberately chose not to do so," said US attorney Damien
"As alleged, in failing to implement even basic anti-money laundering policies, the defendants allowed KuCoin to operate in the shadows of the financial markets and be used as a haven for illicit money laundering."
