On January 27, DOJ announced a cryptocurrency exchange platform (the platform) pled guilty to operating as an unlicensed money transmitting business and failing to implement adequate AML and know-your-customer (KYC) programs. The platform agreed to pay penalties amounting to nearly $300 million. The platform served over 30 million consumers and handled billions in daily trading volume. According to DOJ, the platform flouted U.S. anti-money laundering laws by failing to implement effective AML and KYC programs designed to prevent the platform from being used for money laundering and terrorist financing, failing to report suspicious transactions, and failing to register with the U.S. Department of Treasury’s FinCEN. This allowed the platform to be used for billions of dollars in suspicious transactions, including proceeds from “darknet markets” and various fraud schemes.
DOJ also noted the platform did not register with the FinCEN or file necessary suspicious activity reports despite having approximately 1.5 million registered users and earning around $184.5 million in fees. The platform has agreed to cease operations in the U.S. for at least two years, and two of its founders will no longer participate in its management. In addition to the guilty plea, the platform will forfeit $184.5 million and pay a fine of approximately $112.9 million. The founders have also agreed to forfeit funds received from U.S. operations.
