KuCoin Ceases Operations in Hong Kong Amid Legal Pressures

KuCoin’s subsidiary in Hong Kong, HKVAEX, has opted to withdraw its application for a virtual asset service provider (VASP) license.

This decision highlights the escalating regulatory scrutiny that KuCoin is encountering on a global scale. Particularly, the United States Department of Justice (DoJ) has recently leveled accusations against KuCoin for violating money laundering regulations.

KuCoin Retracts From Hong Kong

KuCoin’s withdrawal from the licensing process in Hong Kong suggests a larger reassessment of its compliance strategies in response to growing regulatory pressures. Analysts speculate that this decision to halt the VASP license application may indicate KuCoin’s plans to revamp its compliance approach.

“Three independent sources confirmed that KuCoin considered ceasing operations and selling the exchange in 2023. KuCoin was launched into criminal investigation by the US in 2023, and has also been subject to multiple investigations in China,” Chinese reporter Colin Wu said.

Furthermore, KuCoin’s strategic shift seems to be driven by recent enforcement actions by US regulatory authorities, prompting a reconsideration of its global operational strategy. The anticipation of potential rejection by Hong Kong regulators amidst legal challenges may have also influenced this decision.

Commissioner Caroline D. Pham of the Commodity Futures Trading Commission (CFTC) emphasized the agency’s commitment to aggressive enforcement measures aimed at safeguarding US investors in response to the legal actions against KuCoin.

“The CFTC has filed another aggressive enforcement action exercising our authority to pursue alleged unregistered crypto asset derivatives trading platforms and other violations of law. I commend the Division of Enforcement’s vigilance in protecting our markets,” Commissioner Pham said.

In the wake of these regulatory actions, KuCoin experienced a significant 58% decrease in its reserves of ERC-20 tokens. Specifically, KuCoin’s reserves dropped from $1.22 billion to $710 million.

The sharp decline underscores the immediate financial repercussions of the regulatory hurdles confronting KuCoin. It underscores the exchange’s pressing imperative to maneuver prudently within the evolving regulatory landscape.

Read more:

Join us on Telegram

Follow us on Twitter

Follow us on Facebook

Follow us on Reddit

You might also like