Dutch Central Bank Issues Warning to Investors Using KuCoin Over Legal Issues
The central bank of the Netherlands, De Nederlandsche Bank (DNB), has issued a cautionary statement regarding the cryptocurrency exchange KuCoin, highlighting that it operates without legal registration in the country. The announcement was made on December 15, citing concerns over compliance with the nation’s regulations to combat money laundering and the financing of terrorism (AML/CFT).
DNB specifically called out MEK Global Limited (MGL), which operates under the name KuCoin in the Netherlands, as being in violation of the law by “illegally offering services” and custody wallets to users.
“Customers of MGL are not in violation,” DNB clarified. “However, this may increase the risk of customers becoming involved in money laundering or terrorist financing.”
KuCoin, established in 2017, is headquartered in Seychelles and has been navigating a complex regulatory landscape as it operates in numerous countries worldwide. The exchange has attracted scrutiny from regulatory bodies amid the broader crypto market downturn and the fallout from the collapse of FTX. CEO Johnny Lyu has previously dismissed rumors regarding the exchange’s insolvency and ensured users about the availability of proof-of-reserves data.
This isn’t the first time DNB has raised similar concerns regarding cryptocurrency exchanges. In 2021, the bank issued warnings against Binance Holdings Limited due to alleged violations of AML/CFT rules, leading to Binance paying over 3 million euros in administrative fines.
As of the time of publication, Cointelegraph reached out to KuCoin for comment but did not receive a response immediately.
