Dutch regulator warns of the risks of trading on KuCoin

The Central Bank noted that the exchange does not have registration in the country, so it is illegal to provide services to citizens

16.12.2022 - 12:05

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What’s new? The Dutch Bank (DNB) has issued a warning regarding the risks of trading on the KuCoin cryptocurrency exchange. The regulator noted that the platform is not registered in the country, and therefore its activities are illegal. The corresponding message is posted on the DNB website.

Warning on the bank’s website

What else did DNB say? MEK Global Limited (MGL), which is registered in Seychelles and offers services on the KuCoin crypto exchange, is not legally registered with the regulator.

The bank’s representatives stressed that MGL violates the Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) law. MGL’s offer of deposit services and exchange of virtual and fiat currencies is also illegal. The company’s clients, while not violating Dutch law, face an increased risk of being involved in money laundering and terrorist financing, the regulator notes.

In early December, the European Commission proposed to oblige crypto companies to disclose data on customer transactions. This measure is intended to prevent tax evasion. The European Commission’s proposal must receive unanimous approval from all members of the European Council. It is expected that the adoption of new rules may occur by 2026.

Also in December, KuCoin hired experts from Mazars to conduct an independent assessment of its reserves. The audit revealed that BTC, ETH, USDT, and USDC reserves are overcollateralized, but Mazars suspended its work with crypto companies and the report is currently unavailable on its website.

For more details on KuCoin’s reserve situation, see GetBlock Magazine’s article.

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