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Dutch Authorities Warn that KuCoin is Operating Without Registration
De Nederlandsche Bank issued a warning that KuCoin is not properly registered and that its customers are at an increased risk of getting involved with “money laundering or terrorist financing.”
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According to a Thursday report, the cryptocurrency exchange KuCoin is operating in the Netherlands without being properly registered. The warning issued is specifically aimed at MEK Global Limited (MGL), the company that owns the exchange.
KuCoin Operating Without Registration in the Netherlands
According to the Dutch Central Bank (De Nederlandsche Bank), the Seychelles-registered MEK Global Limited is operating in the Netherlands through its subsidiary KuCoin without proper registration. The announcement states that the customers of the exchange are not in violation but that they are at an increased risk of “becoming involved in money laundering or terrorist financing.”
In 2021, Binance, the world’s largest crypto exchange, found itself in a similar situation. On August 18th, 2021, the Dutch Central Bank announced that CZ’s company is offering its services without properly registering with the institution and, thus, illegally. This announcement similarly warned customers of an increased danger of getting involuntarily involved in money laundering and terrorist financing.
Ultimately, Binance resolved its issue with the Dutch authorities by paying fines totaling 3.3 million euros to the country’s central bank. In its announcements, De Nederlandsche Bank provides a link to its register of authorized cryptocurrency companies.
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Cryptocurrencies in the Benelux Countries Throughout 2022
Like Binance and KuCoin, Coinbase made headlines in the Netherlands in 2022. However, unlike the other two, America’s only publicly-traded crypto exchange earned its spotlight by becoming the world’s first major crypto exchange to gain regulatory approval in the country in late September.
Perhaps more notably, the Netherlands fund itself at the center of the Tornado Cash blacklisting that happened earlier this year. On August 12th, a developer of the cryptocurrency mixer was arrested in Amsterdam by the Dutch police. More recently, it was announced that he would remain in custody until at least February 2023.
Belgium, another of the Benelux countries, found itself in the news recently for an entirely different reason. While the regulators in the US have been hotly debating the legal and regulatory status of various cryptocurrencies, the Belgian watchdog published a report detailing why digital assets like Bitcoin and Ethereum are neither securities nor financial instruments.
Do you think KuCoin will be fined in a similar manner to Binance? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
