[RESOLVED] kucoin claiming kyc now mandatory demanding ID documents to withdraw

[M-BTC]

Depositing and withdrawing funds, without making trades, is a huge AML red flag. Exchanges are basically huge mixers. If you deposit funds into an exchange and withdraw those funds there is no way to trace where the funds are going.

Not a valid excuse to hold somebody's funds without any sort of way to get them back. Exchanges are only decent mixers if they are completely anonymous, like a DEX, and even then there's ways to see who got what, where its been, and where its going. Exchanges that ask for KYC are the exact opposite of mixers.

And of course there's a way to trace where the funds are going, its called blockchain analytics.

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).

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?

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. 

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[nutildah]

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. 

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

[M-BTC]

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. 

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

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.

[nutildah]

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.

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.

according to AML/CFT policies

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?

[M-BTC]

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.

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.

according to AML/CFT policies

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?

I never stated that KuCoin was/is contacting local authorities, I said that I wouldn't be surprised if that was the case.

It's not just about AML policies from individual countries, these policies are globally used. KuCoin is based in Singapore, who happen to be a member of FATF (Financial Action Task Force). This is taken from FATF's latest recommendation:

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).

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

I am replying to this thread to help OP understand why they KuCoin could be doing this. For the third and final time, I'm not saying I agree with FATF or other AML/CFT policies like AMLD5 nor am I trying to justify them. Saying that I do not know what I'm talking about seems a bit out of place for obvious reasons. There is plenty of documentation available online about FATF, US, EU and Asian policies, including examples of what kind of behavior can be seen as suspicious.

[bitcoinjesus2020]

3rd update: Sept. 5, 2020 (funds still not released despite this email from them) The email I mentioned above which was communicated to me by "winnie" (this is the 4th communication from this person the same 1st one I spoke to claiming it was a technical issue then changed the reason to this kyc thing) stated this:

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

So I responded and I think this is the 8th or 10th time I told them same thing:

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.

Their response:

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

I am under the impression that I would have received or had my funds released by now according to these communication because the 5 working days has passed and it may seem they have not made an internal decision to terminate the business relation because I can still login.  I have blatantly refused the kyc obviously here and I specifically stated so in multiple emails.  I am unsure of the wording because it seems to say to me that I should see the funds by 5 working days and in 15 days they may make a decision, again really unsure so I would like thoughts on this please.  Considering the last response and it's implied actions I do not think they are being honest yet and my funds are absolutely NOT "safe".  Thoughts?

[nutildah]

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

Nobody is asking them to "under-interpret money laundering signals." We're just asking them to be smarter and more fair about the way that they go about doing it.

FATF are also not the ones telling KuCoin what specific policies they need to implement in order to remain legal. Read their recommendations for yourself:

https://www.fatf-gafi.org/media/fatf/documents/recommendations/12-Month-Review-Revised-FATF-Standards-Virtual-Assets-VASPS.pdf

I know people who have deposited thousands of dollars on other exchanges like eToro, Binance and Coinbase and withdrawn them the next day without any problems, so obviously its not a universal policy. As I said earlier it is simply KuCoin's interpretation of how AML policies should be implemented that is the problem. I've dealt with dozens of exchanges over the years and separating a user from their funds because they refuse to perform KYC should never be OK.

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.

If they don't release your coins within the next week or so, let me know and I will put a red tag on their account.


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:

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

Dear KuCoin User,
...
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.

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.

[bitcoinjesus2020]

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:

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

Dear KuCoin User,
...
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.

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.

Thank you I sincerely appreciate it.

I am thinking the same thing, so I sent an email after I posted and their response included was this:

Your request (312408) has been updated. If you need to add additional comments, reply to this email.
----------------------------------------------

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

----------------------------------------------

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)" <support@kucoin.com> wrote:

----------------------------------------------

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

I have been reviewing threads for many other kyc scam accusations and almost all of them end up going down this path, basically putting things off to an imaginary "department" that never seems to have an "update", passing the buck is the term I think.  Maybe I am being premature but, the timeline to return my funds is close to an end if not already passing. 

[nullCoiner]

still no response so far? waiting for an happy end... please let us know how it ended... Depending on the end i may have to reconsider my trading and use of services with Kucoin...

[bitcoinjesus2020]

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

[nullCoiner]

thanx for updating us, there are enough good alternatives. good luck out there.

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

[aioc]

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

This is noted and a reference, the pressure is on them I thought based on this comment from Kucoin they are not going to grant the request

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.

It's a win win situation for them it's not right to keep the user's fund it's more like stealing for them and Kucoin kept his reputation, it's better to wash their hands this way, than holding on something that is not theirs.