KuCoin to flag indirect transfers tied to 17 sanctioned platforms

KuCoin published a compliance notice on Aug. 27 announcing it will hold, reject or otherwise restrict transactions that are indirectly linked to 17 sanctioned crypto platforms by screening the source of funds, origin and destination addresses, and intermediary service providers even when users did not send funds directly.

The notice named Shelbit; Aban Tether Exchange; A7 Nigeria; A7 Africa; PilotFinance Ltd; Rapira; Aifory Pro (Sooty Ltd.); ABCeX (Nueva Cryptologia S.A.S DE C.V.); WhiteBird; NoOnecrypto Inc.; Tradex (Brightum LLC); Monease Ltd; BitPapa; Exnode; Exnode Pay (Arvix); EXMO Ltd; and HTX (Huobi Global SA) as covered entities.

The exchange indicated transactions involving those providers may face enhanced review and that repeated or serious violations could lead to suspension or withdrawal of KuCoin services for an account. KuCoin did not disclose how many intermediary hops it will trace or what level of on-chain attribution is used to establish an indirect link.

The notice lists effective dates for individual providers, with some entries dated Aug. 7, others Aug. 13 and a group including Rapira, Aifory Pro, ABCeX, WhiteBird, NoOnecrypto, Tradex, Monease, BitPapa, Exnode, Exnode Pay, HTX and EXMO under Aug. 23. The notice indicates KuCoin may screen both originating and receiving addresses and the intermediaries used in a transfer, which can trigger temporary wallet or account restrictions or rejected transactions if a connection to a listed platform is detected.

HTX is the largest entity on the list by scale. Several major exchanges have applied similar restrictions, and one large exchange stopped processing transactions involving HTX and 10 other platforms from Aug. 23.

HTX has disputed the sanctions-related allegations and the corporate identity used in the designation, asserting Huobi Global S.A. is distinct from the online HTX exchange and that it is engaged in legal and compliance discussions with UK and EU authorities.

Molly, HTX’s head of markets, reported the exchange processed more than 100,000 deposit and withdrawal transactions over two days without identifying new cases of indiscriminate freezes. HTX submitted materials relating to 17 Kraken user freeze cases to the courts and upgraded wallet infrastructure and a withdrawal-address rotation mechanism intended to reduce disruption from third-party risk controls and on-chain labeling.

For users, funds that passed through an intermediary service or were routed via other addresses may be flagged before they arrive at KuCoin, depending on the transaction path and the data KuCoin uses to attribute addresses to the listed platforms. Where a connection is found, transactions can be held for enhanced review, rejected outright, or lead to temporary restrictions on wallets and accounts.

Exchanges are increasingly checking where funds originated, which services they touched en route, and their intended destinations to comply with sanctions and regulatory requirements. KuCoin did not provide details on the technical methods it will use or the threshold for labeling a transfer as indirectly linked, leaving uncertainty for users and custodial services about how aggressively on-chain tracing will be applied.

KuCoin cautioned that serious or repeated infractions could result in longer-term account actions, including suspension of services.