Key Takeaways
- ZachXBT accused Kucoin of routing $13M+ in stolen funds in April while ignoring German law enforcement.
- The exchange has faced a $300M DOJ settlement, a $500K CFTC penalty, and regulatory bans in Austria and Japan in recent months.
- With no public response from Kucoin, the exchange’s AML credibility is under mounting scrutiny.
ZachXBT Says Kucoin Is ‘Complicit’
The pseudonymous blockchain sleuth posted a direct broadside against Kucoin on May 22. “The team is complicit and allows illicit activity to flow as long as it generates fees,” ZachXBT wrote on X, noting that German law enforcement has been unable to get any response from the exchange. He further added that he has raised these concerns publicly before and is running out of options to compel action.
The accusation builds on a trail of documented incidents, as earlier in April, ZachXBT exposed what he described as large-scale laundering through Kucoin’s infrastructure. A fake Ledger Live application listed on Apple’s Mac App Store was used to steal approximately $9.5 million from more than 50 victims (between April 7 and April 13).
The funds (spanning bitcoin, ether, tron, solana, and XRP) were rapidly funneled through over 150 Kucoin deposit addresses before flowing into a centralized mixing service called AudiA6. A separate theft of $3.5 million from Bitcoin Depot was similarly routed through more than 25 Kucoin addresses just days earlier.
ZachXBT calculated that over $13 million in recently stolen funds had moved through Kucoin in a matter of weeks, a figure bound to raise serious questions about the exchange’s anti-money laundering (AML) screening processes.
Kucoin’s Compliance Troubles Deepen Across Multiple Jurisdictions
Reference to German law enforcement points to an active investigation, possibly tied to victims of the April thefts, that Kucoin has declined to cooperate with. Without exchange cooperation, investigators have a limited ability to trace funds or freeze assets in time.
Kucoin’s regulatory standing has deteriorated across multiple jurisdictions in 2026, as earlier this year, Austria’s financial regulator barred Kucoin from onboarding new European Union users. Subsequently, in March, Japan’s Financial Services Agency (FSA) added the exchange to its list of unregistered operators.
That said, the exchange’s most significant U.S. legal exposure came in 2024, when the Department of Justice (DOJ) charged Kucoin with operating an unlicensed money transmitting business. Kucoin subsequently agreed to a near $300 million settlement to resolve those charges in January 2025.
Separately, the U.S. Commodity Futures Trading Commission (CFTC) reached a $500,000 civil penalty settlement with Kucoin’s parent company for operating as an unregistered futures commission merchant.
