On-chain detective ZachXBT alleged that cryptocurrency exchange KuCoin sent legal threats to a user whose account was compromised in 2025, resulting in a $250,000 theft. According to ZachXBT's claims, the stolen funds were subsequently laundered through KuCoin accounts registered under shell entities using purchased KYC verification credentials.
ZachXBT further asserted that KuCoin blocks legitimate users, facilitates money laundering on its platform, and responds sluggishly to law enforcement inquiries regarding affected victims. The allegations underscore persistent concerns about exchange security protocols and compliance procedures, particularly regarding the vetting of account holders and the verification systems used to prevent illicit activity.
The accusations add pressure on KuCoin, which has faced multiple regulatory scrutiny episodes. The exchange has not yet publicly responded to ZachXBT's claims.