KuCoin Faces New Scrutiny Over Alleged Legal Threat to Victim

Blockchain investigator ZachXBT said KuCoin sent legal warnings to a victim whose stolen funds were routed through the exchange. The case involves a reported $250,000 theft via Atomic stealer malware on Aug. 18, 2025, according to a Telegram post from ZachXBT.

The post lists one theft address and five addresses ZachXBT linked to KuCoin deposits. The accounts used what he called “purchased mule KYC,” a term for accounts verified with someone else’s identity. Court filings or an official statement from KuCoin have not confirmed these claims.

A screenshot shared with the post appears to show a message from KuCoin’s Customer Care and Support Team. It says KuCoin respects the right to raise concerns through legal and regulatory channels. The message warns that false or unlawful statements may lead to legal claims. It also says, “All rights are expressly reserved.”

The dispute adds to years of pressure on KuCoin’s compliance record. In January 2025, the U.S. Department of Justice said KuCoin pleaded guilty to operating an unlicensed money transmitting business. It agreed to pay more than $297 million in penalties. The DOJ said KuCoin failed to maintain effective AML and KYC programs and allowed suspicious activity. Prosecutors charged KuCoin and two founders in March 2024, alleging the exchange processed more than $5 billion in suspicious funds between 2017 and 2024.

A separate crypto.news report said a fake Ledger Live app stole at least $9.5 million from more than 50 victims earlier this year. Stolen funds were routed through more than 150 KuCoin deposit addresses into a centralized mixing service. ZachXBT traced funds through transactions into KuCoin deposit addresses linked to an account called AudiA6. The report noted recovery would require law enforcement action and exchange cooperation.

KuCoin secured a MiCA license in Austria through its European subsidiary in late 2025. Austria’s regulator later barred the European arm from new business and onboarding customers, citing compliance staffing issues. The restriction followed KuCoin’s push to present itself as a regulated European platform.

For users, the pattern raises questions about whether KuCoin has addressed the compliance gaps cited by the DOJ. The alleged legal threat to a victim, combined with the earlier penalties and the regulatory bar, points to ongoing friction between the exchange’s stated compliance posture and its operating reality. Traders holding assets on KuCoin may want to monitor withdrawal queues and any regulatory escalation. A formal investigation or a fresh penalty would increase pressure on the exchange’s reputation and liquidity. A clear statement from KuCoin about its handling of mule KYC accounts would reduce that risk.