KuCoin, a cryptocurrency exchange, faces allegations of violating anti-money laundering laws, as charged by the United States.

KuCoin, a prominent cryptocurrency exchange, along with two of its founders, faces allegations of violating anti-money laundering laws under the Bank Secrecy Act, as charged by U.S. federal prosecutors. Homeland Security Investigations Special Agent Darren McCormack described KuCoin as “an alleged multibillion-dollar criminal conspiracy.” The announcement led to a 5% drop in KuCoin’s native token (KCS) following the news.

According to the U.S. Department of Justice, KuCoin and its founders Chun Gan and Ke Tang operated the exchange as a money-transmitting business with over 30 million customers without implementing a know-your-customer (KYC) or anti-money laundering (AML) program until 2023. The indictment further stated that KuCoin did not register with the U.S. Financial Crimes Enforcement Network as a money services business, making itself susceptible to being used for money laundering activities.

The indictment also highlighted allegations that KuCoin indirectly received over $3.2 million worth of cryptocurrency from Tornado Cash, a sanctioned crypto mixer, and was mentioned in criminal filings against two of Tornado Cash’s developers. Additionally, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against KuCoin, accusing the exchange of not registering as a futures commission merchant and failing to implement the CFTC’s equivalent of a KYC program.

In a statement, Homeland Security Investigations Special Agent in Charge Darren McCormack labeled KuCoin as an “alleged multibillion-dollar criminal conspiracy,” emphasizing its significant presence in the cryptocurrency market. U.S. Attorney Damien Williams noted that KuCoin actively tried to conceal the presence of U.S. users trading on its platform, allowing it to operate as a haven for illicit money laundering.

Following the announcement, KuCoin’s native token (KCS) experienced a 5% drop in price, while Bitcoin’s (BTC) price showed volatility throughout the day, currently trading around $70,000. These legal actions against KuCoin come shortly after similar charges were settled against Binance, the world’s largest cryptocurrency exchange by trading volume.