The central bank of the Netherlands, De Nederlandsche Bank, issued a warning to investors in KuCoin, stating that the exchange was operating without legal registration.
In a December 15 announcement, the central bank said that MEK Global Limited, or MGL, which operates in the Netherlands as KuCoin, did not comply with the country’s regulations against money laundering, or AML, and the equivalent of combating the financing of terrorism, or CFT. De Nederlandsche Bank added that the company was “illegally offering services” as well as “illegally offering custodial wallets” for users.
“MGL’s clients have not committed a violation,” the bank said. “However, this may increase the risk of customers being involved in money laundering or terrorist financing.”
DNB warns against MEK Global Limited, doing business as KuCoin https://t.co/kgh6XVkYbI
— From Nederlandsche Bank (@DNB_NL) December 15, 2022
First launched in 2017, KuCoin is based in Seychelles and operates in most countries around the world. As a major cryptocurrency exchange, KuCoin has come under scrutiny by regulators and lawmakers amid the cryptocurrency market crash and FTX collapse. CEO Johnny Lyu shot down rumors of the exchange’s insolvency in July, and the firm provides proof-of-reserves data to users.
In 2021, De Nederlandsche Bank made similar allegations about illegal operations by Binance Holdings Limited and the risk of violating anti-money laundering and anti-terrorist financing regulations. Binance Company later paid an “administrative fine” of more than €3 million due to the violations.
Cointelegraph reached out to KuCoin for comment, but did not hear back by press time.
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