De Nederlandsche Bank warns that this could make their clients more susceptible to money laundering and terrorism financing.
Investors using KuCoin have been warned by the Dutch central bank, De Nederlandsche Bank, which claimed the exchange was operating illegally.
The bank announced on December 15 that MEK Global Limited (MGL), doing business in the Netherlands as KuCoin, was not in compliance with the country’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regulations. According to De Nederlandsche Bank, the cryptocurrency company was “illegally offering services” and “illegally offering custodian wallets for users.”
Clients of MGL are not in violation, the financial institution claims. Customers’ propensity to engage in illegal activities like money laundering and terrorist financing may increase as a result of this, though.
KuCoin was founded in 2017 and has offices in Seychelles. It serves customers all over the world. With the cryptocurrency market in a tailspin and the demise of FTX, KuCoin, as a major cryptocurrency exchange, has come under increased scrutiny from regulators and lawmakers. In July, when rumors circulated that the exchange was going bankrupt, CEO Johnny Lyu quickly shot them down. The company also offers proof-of-reserves data to its customers.
Binance Holdings Limited was accused of illegal activity related to AML/CFT regulations by De Nederlandsche Bank in 2021. In the end, Binance paid a “administrative fine” of over €3 million because of the infractions.
Cointelegraph attempted to contact KuCoin for comment but did not receive a response before publication.
