Both are correct but there's a difference in meaning, of course. I know (now) you cheated (in the past). (this doesn't necessarily mean that you found out later that he cheated in his exam.
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michaeltingFrom my point of view, knew means you knew in the past, but don't know about it right now.Suppose you were taking the test yesterday and you saw your friend cheating. You knew he was cheating and you were angry because he was so dishonest.