The Dutch central Bank, in a Dec. 15 announcement, warned investors using KuCoin that the exchange was operating without legal registration.
MEK Global Limited (MGL), which is registered in the Seychelles and trades under the name KuCoin in the Netherlands, was found to be in violation of the country’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regulations, according to De Nederlandsche Bank (DNB).
The Dutch central bank (DNB) announced that KuCoin was not “legally registered” with the DNB, in violation of the Anti-Money Laundering and Terrorist Financing Act. DNB issued a similar warning to Binance in August 2021 and imposed a fine of $3.3 million. https://t.co/BkHER6XlGe
— Wu Blockchain (@WuBlockchain) December 16, 2022
MGL, according to the Bank, “is acting in violation of the law on preventing money laundering, financing terrorism, and offering illegal services.”
DNB did not say what it would do if KuCoin continued to operate illegally. Customers of KuCoin and MGL are not breaking the law, according to the DNB, but they may “have a heightened risk of becoming involved in money laundering and terrorism financing.”
KuCoin, which was founded in 2017, is headquartered in Seychelles and operates in over 200 countries. It is one of the largest cryptocurrency exchanges in the world by trading volume, partly due to its low trading fees. As a major crypto exchange, KuCoin has been scrutinised by regulators and lawmakers in the aftermath of the crypto market downturn and the downfall of FTX.
In july, when a sub-community of Crypto Twitter began warning investors about an impending ban on fund withdrawals, KuCoin found itself at the centre of attention. KuCoin CEO Johnny Lyu, on the other hand, was quick to dismiss the unverified rumours before they gained traction. And the firm also provides users with proof-of-reserves data.
De Nederlandsche Bank made similar allegations of illegal operations against Binance Holdings Limited in 2021, claiming that the company violated AML/CFT regulations. According to the Bank, Binance is illegally providing crypto services as well as custodian wallets without the necessary legal registration. Binance was later fined more than 3 million euros due to the violations.
