In a recent Medium post by Hong Kong independent journalist Jackson Wong, the reliability and safety of KuCoin as a crypto exchange was called into question. In the report, titled “WARNING: KuCoin’s Hong Kong office is empty. Be extremely cautious about depositing money into this exchange,” the reporter expressed his concerns that popular crypto exchange KuCoin could be pulling an exit scam as their Hong Kong offices are empty.
Long Held Suspicious Regarding KuCoin
Wong began his report by recapping his previous concerns about the KuCoin exchange, discussing that he feared they would become illiquid during the next crypto crackdown by the Chinese government. He claimed that the exchange apparently survived the “hit” by staying under the radar.
Wong then went on to discuss that he feels that KuCoin has always been suspicious because it was home-grown in Hong Kong. Wong claimed that within the Hong Kong community he has never heard of the exchange, and that if they were ever based there that the Securities and Futures Commission of Hong Kong (SFC) would have already taken actions to suspend trading on the exchange.
In addition to the fact that the exchange has apparently avoided persecution by regulatory agencies, Wong added that he has never seen any local news reports or promotions about the exchange in Hong Kong. He also called into question the KuCoin team, saying that “none of their directors have Hong Kong names nor do any one of them reside in Hong Kong,” and that “For Chinese nationals to live in Hong Kong, they actually need either a working visa or to apply for a citizenship of Hong Kong.”
Wong Visited the So-Called KuCoin Offices
At this point, the claims against the Hong Kong based exchange can only be defined as anecdotal, so Wong visited the registered address of the KuCoin headquarters, which listed the company as being located in offices in the Kiu Fu Commercial Building on the 20th floor.
When looking at the directory board of the building, the only offices located on the 20th floor is a company called “Rich Moral CPA” and “Smart Team International Consultants.” Wong emphasizes that he didn’t see KuCoin listed anywhere on the directory board. Wong also importantly noted that KuCoin used to be listed under a secretarial company called Smart Team Secretarial Ltd, which is closely related to “Smart Team International Consultants,” so he rang the office bell hoping to get a response from a KuCoin representative.
Wong claimed that a representative from Rich Moral CPA answered and informed him that the Smart Team moved out of the offices years ago, despite the remaining signage. Wong also reports that the representative from Rich Moral CPA said that even when the Smart Team was there, that she never heard of KuCoin exchange or anything crypto related.
Where is KuCoin Running Their Operations From?
Wong concluded his investigative report with some theories about where KuCoin is running their operation from, saying:
“I suspect they are either working back in Sichuan of China, as the previous post have mentioned, or they are working somewhere remotely at home in Hong Kong? But that can’t be right, right? It’s a huge exchange and they are only working at home…Well, let’s take a step back. Maybe they have an office elsewhere in Hong Kong? But honestly, I don’t believe that can be the case, as we know that they don’t have Hong Kong ID cards or passports. They can’t just enter Hong Kong as they wish…Chinese nationals can’t just come in and out without a permit.”
The risks of putting money on an exchange without a verifiable headquarters is that if the exchange were to exit-scam its clients by withholding withdraws or by shutting down the exchange randomly, there would be no recourse. Users would not be able to go to state regulators to get their funds back because the exchange employees could be anywhere in the world.
Wong closes his report by warning investors to avoid the exchange until it becomes more transparent, saying:
“They are just too shady. They told us that they have an office in Hong Kong. But that’s all a lie. No one’s even there! It’s completely empty. And most importantly, they don’t even have a Hong Kong license to deal in cryptocurrencies.”
KuCoin has not yet responded to the accusations within Wong’s investigative report.