Topic: [RESOLVED] kucoin claiming kyc now mandatory demanding ID documents to withdraw (Read 842 times)

They have allowed me to withdraw my coins however have frozen my account.  No loss I will not be trading there ever again.

Thank you for your suggestion. Please understand that every exchange is developing its own risk management and anti-money laundering policy. It is difficult to say whose policy is the best, though we are open to suggestions and are willing to improve. For now, we would appreciate if you could respect our rules. Thank you for helping us create a safe and fair trading environment.

They have allowed me to withdraw my coins however have frozen my account.  No loss I will not be trading there ever again.

OP: I wish I could help you more but XMR is a tricky situation since it is not traceable on its blockchain, and thus much harder to prove that your source of funds is legit. However, having read this:


Sounds like they are saying they will indeed release your funds back to you, so that's positive. That was 5 days ago. So you should be getting your funds released shortly (2-3 days) because you clarified with them that you indeed want to "terminate your business relationship".

If they don't do this I will show you how to open a Flag on their account which will indicate to anyone who visits the KuCoin thread that they don't live up to their word and people should be wary before depositing coins there.

Your request (312408) has been updated. If you need to add additional comments, reply to this email.
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Sukey, Sep 6, 2020, 11:06 GMT+8

Dear Valued KuCoin User,

Thanks for contacting KuCoin customer support.

We do value your experience on KuCoin and really sorry for the inconvenience caused to you. We have passed your information to relative department.

Kindly wait patiently and we will reply you once getting updates.

If you have any questions or concerns regarding this process, please don't hesitate to let us know.

Best regards,
Sukey

KuCoin Customer Care and Support Team

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bitcoinjesus, Sep 5, 2020, 21:42 GMT+8

It has been 5 days. What is going on now?


On Sun, 30 Aug 2020 16:40:51 +0000
"Winnie (KuCoin)" <[email protected]> wrote:

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Roger, Sep 2, 2020, 17:44 GMT+8

Dear Valued KuCoin User,

Thank you for contacting KuCoin customer support.

We have received your request, we will submit to our legal team to review and will get back to you when we get updates, thanks for your support.

If you have any questions or concerns regarding this process, please don't hesitate to let us know.

Kind regards,

Danae
KuCoin Customer Care and Support Team

Exchanges will not take the risk of under-interpreting money laundering signals because that could result in the loss of their licenses.

They take one day for every response. It has been 6 days now.
I am down over 15% while I still have to pay TAX on the full amount the moment I received it.

Winnie, Aug 31, 2020, 12:40 AM GMT+8

Dear KuCoin User,

Hope you are doing well receiving this email. First of all, thank you very much for your kind patience and cooperation. We fully understand your feelings and situation and we are earnestly to step forwards with you and resolve all the problems and difficulties in-between. However, KuCoin Support would like to emphasize some points again regarding to your case:

1.   KuCoin Digital Asset Exchange, similar as all other virtual assets service providers, is having its own risk control mechanism in accordance with the requirements of the Proceeds of Crime Act, Anti Money Laundering and Counter Terrorist Financing legislations.

2.   KuCoin has the ongoing obligation of monitoring every account activity, no matter with KYC verified or not. However, all information is within KuCoin only and there should be no concern of any information leaking or for any other illegitimate usages.

3.   KuCoin has standardized customer due diligence procedures to follow in case of any suspicious transactions or behaviors observed.

What you are facing recently is only temporary frozen, which is quite normal. Your account, just like all other KuCoin accounts, has been filtered by our risk control system automatically based on a variety of elements combined. The system alerted us with your case and we are just following our Enhance Customer Due Diligence process to ask you to provide more information about the ultimate beneficiary owner of the alerted account and the legitimacy of the source of the wealth. Therefore, we sent you the email previously about the KYC verification and ECDD document filing.

Besides, we would like to point out again, that your funds are ABSOLUTE SAFE with KuCoin, no matter your funds are acceptable to us or not. If there really does exist some risky part of your wealth that KuCoin deemed as unacceptable and decided to terminate business relationship with you, your funds would still be ABSOLUTELY SAFE and would be released to you within 5 working days since the termination decision been made. Normally, we would wait for our customers to submit their KYC, ECDD and other supplementary documents for 15 working days. If customer still refuse to provide any information we required, a decision of terminating business relationship would be put forward.

Thank you again for your understanding and we sincerely apologize if KuCoin’s risk control procedure cause you any worries and inconveniences. If there is further question, feel free to contact KuCoin Support Team.

Kind regards

KuCoin Customer Care and Support Team

bitcoinjesus, Sep 1, 2020, 6:04 AM GMT+8

Fine and like I keep telling you I want to no longer do business with kucoin so you may as well prepare to release my funds or simply let the deposit go.

I do not feel comfortable with this behavior from kucoin which is why I do not want to be involved with kucoin ever again for the rest of my life.

Danae, Sep 2, 2020, 5:44 PM GMT+8

Dear Valued KuCoin User,

Thank you for contacting KuCoin customer support.

We have received your request, we will submit to our legal team to review and will get back to you when we get updates, thanks for your support.

If you have any questions or concerns regarding this process, please don't hesitate to let us know.

Kind regards,

Danae
KuCoin Customer Care and Support Team

So admittedly you don't know for sure that KuCoin would report a deposit/withdrawal as "suspicious" to the authorities and that assertion is 100% based on your own speculation.

Sorry but I get the feeling you simply don't know what you're talking about and frankly I don't understand why you commented here in the first place.

KuCoin doesn't require KYC unless a user wants to withdraw 5 or more BTC worth of coins per day or they feel "suspicious activity" has taken place on the part of the user. What "suspicious activity" constitutes is totally up to them.


Says nothing about what you are talking about -- at this still early stage in the game, how an exchange interprets an individual country's AML policies is purely up to the exchange. There is no standard in this regard.

If an exchange is too heavy handed with springing KYC upon people and with-holding their coins unjustly then its our duty to warn other potential users not to use said exchange. In kaefergeneral's case, there is absolutely no reason for them to with-hold his funds and just because their terms & conditions says they can doesn't mean they won't soon have a negative reputation among the crypto community.

The reason why its interesting to me is because I've been a KuCoin user for years and never had a KYC request. But now I have to consider the prospect of steering people away from them.

Why is it interesting to you?

Financial institutions should be required to undertake customer due diligence (CDD)
measures when:
(i) establishing business relations;
(ii) carrying out occasional transactions: (i) above the applicable designated threshold
(USD/EUR 15,000); or (ii) that are wire transfers in the circumstances covered by the
Interpretive Note to Recommendation 16;
(iii) there is a suspicion of money laundering or terrorist financing; or
(iv) the financial institution has doubts about the veracity or adequacy of previously
obtained customer identification data.
The principle that financial institutions should conduct CDD should be set out in law. Each
country may determine how it imposes specific CDD obligations, either through law or
enforceable means.
The CDD measures to be taken are as follows:
(a) Identifying the customer and verifying that customer’s identity using reliable,
independent source documents, data or information.
(b) Identifying the beneficial owner, and taking reasonable measures to verify the identity
of the beneficial owner, such that the financial institution is satisfied that it knows who
the beneficial owner is. For legal persons and arrangements this should include
financial institutions understanding the ownership and control structure of the
customer.
====================
20. Reporting of suspicious transactions *
If a financial institution suspects or has reasonable grounds to suspect that funds are the
proceeds of a criminal activity, or are related to terrorist financing, it should be required, by
law, to report promptly its suspicions to the financial intelligence unit (FIU).

As I tried to explain earlier making a deposit, followed by a withdraw, can be seen as a mixing attempt, which is a money laundering indication. That doesn't mean that OP is involved in illegal activities, trying to launder money etc. but it COULD be the case. The fact that it COULD be the case is enough reason, according to AML/CFT policies, for exchanges/financial services to ask for KYC/additional information or even report the transaction to local authorities. I'm not trying to justify or defend these policies, I'm merely trying to explain how they work. The exchanges are simply obliged to follow these policies, otherwise they're not allowed to operate.

according to AML/CFT policies

Why would a deposit to an exchange constitute a "suspicious transaction"?

Because that is how AML policies work. You're guilty until proven innocent, not the other way around. Exchanges/financial institutions are obliged to report suspicious transactions. Local authorities will determine if they want to do a follow-up investigation or not. 

A "money laundering indication" is not the same thing as money laundering. You do understand that right? What would they report him for what exactly?

Can we post this thread to the kucoin thread so they can address this matter accordingly? They are still active here in the forum so maybe we can have direct from them.

https://bitcointalksearch.org/topic/ann-exchange-kucoin-exchange-5163269

Yea I did some digging on my end and as far as I can tell I neither violated Hong Kong (where Kucoin is based) nor my local AML thresholds that would warrant reporting my transactions to authorities.
So I doubt that is what happened. For reference, the CDD threshold by HK AML regulations is $8000 for wire transfers.
The guidelines can be verified here.

If they can make a proper case that warrants enhanced due diligence, and I do have to admit, that they could in my case, they are allowed or even required to demand Identification.
But, as far as I can tell neither HK nor European AML regulations require the data KuCoin is demanding.
HK AML Identification state only:

• full name
• date of birth
• nationality
• unique identification number (passport / ID)

My 'local' AML in addition also always requires a residential address.

But sending a shit ton of private information, unencrypted across the globe to be permanently stored by some shady company goes against about everything I believe in.
I simply don't see what applicable laws or regulations I should have violated. Even after asking multiple times, they did not provide me with a reason or regulation I may have violated, other than that they want me to submit this data.
As the whole process took place on a Friday evening an order by law enforcement or governmental authority is highly unlikely.

I do get, how creating a new account depositing funds and then trying to withdraw them again might trigger red flags. Thus why I was willing to comply with KYC.
But the privacy invasion beyond this is and in this form is simply out of place.

You could be right about their inability to communicate properly, but you kind of started off on the wrong foot with them. You were immediately accusatory and didn't ask for help, only pointed to this accusation.

I know it feels like they have you bent over a barrel but your only option currently is to submit the KYC documents. If I ran an exchange, I wouldn't hold funds over surprise KYC issues, I would let the user withdraw them back to their original address (I know with XMR that's a bit more difficult to prove). But, I'm not an exchange, so you kind of have to do what they say.

If you get to the stage of kaefergeneral where they took your KYC and your coins, then let me know here and I will help you to open a flag against them. That will put up a warning message that is visible to everyone who can see their thread. If company/project cares enough about their reputation on the forum, they will find your accusations worth responding to, potentially helping you to resolve the issue.

As of right now, however, there is more evidence in kaefergeneral's case to warrant a flag or a red tag as they actually underwent the KYC and still haven't received their coins. I will tag the KuCoin Exchange account and point them to this thread to see if they will respond. Gonna give them a couple days to respond to my comment in their thread before tagging them.

It is a valid excuse to hold the funds (according to AML/CFT policies). Chain analysis can't link deposits and withdrawals on exchanges without contacting the exchanges and having them provide the information. This is why similar actions (depositing and withdrawing without making trades) are flagged and will result in having to provide KYC information, as it is a money laundering indication. Exchanges have no other option than to follow the AML/CFT regimes.

Don't get me wrong, I'm not giving my personal opinion here but this is how these policies work. Regulations will only get worse from here. I wouldn't be surprised if they already reported OP's transaction(s) to local authorities (if they know what country he's from).