KCEX's Opaque Business Practices Raise Concerns About Regulatory Compliance
A Seychelles-based crypto exchange called KCEX recently approached @MastrXYZ, a cryptocurrency scam investigator on X, to offer an affiliate partnership. However, it seems that KCEX mistakenly believed @MastrXYZ was an influencer promoting shady exchanges for a cut.
@MastrXYZ responded by listing several red flags associated with KCEX, including the exchange's lack of independently verifiable Proof of Reserves and transparent public disclosure of its controlling parties. He also noted that KCEX touts having an MSB license, which is actually just a registration requirement for Money Services Businesses with FinCEN.
The investigation found that KCEX does not hold a CASP (Crypto-Asset Service Provider) license under the MiCA regulation in Europe and was absent from the Seychelles Financial Services Authority's public VASP register, despite the December 2024 deadline for existing exchanges to apply for a VASP license.
KCEX has a large trading volume of over $19.1 billion as reported by CoinGecko, but its exchange reserves data is unavailable. The exchange also does not require mandatory KYC verification for basic account use, allowing unverified trading with up to 30 Bitcoin daily withdrawal limits.