Hey guys,

first of all, I don’t want to spread any FUD, I was holding a high amount of KuCoin Shares, that’s the reason why I wanted to start a research myself. I got a bit skeptical after I saw all those raffles for winning 5 BTC, a Porsche and so forth, so I just wanted to make sure this doesn’t end like BIIITCOONNNEEEEEEEEEEEEEEEEEEEECT!

I refer to the article from @jacksonwong2244: https://medium.com/@jacksonwong2244/warning-kucoin-is-operating-in-sichuan-of-china-e08ca697030e

Jackson Wong claims that KuCoin is still operating in China and earned a lot of hate for FUD on Reddit.

I add all details I know so you guys can do your own research, I am kinda limited to Google as I don’t speak any Asian language.

I’ll start with what I’ve found about the history of KuCoin

KuCoin started as Kubi.com, which launched in summer 2017.

KuCoin belonged to the company “Coin (Chengdu) Technology Co., Ltd.”, Business Registration №510109001164036, legal representative is Tang Ke, who turns out to be Eric Don, the COO of KuCoin.

The address:

High-tech Zone Chengdu Yulin Road 50, 1st Floor, Chengdu, SICHUAN, CN

So at this moment I have to disagree with @osmantoplica, who wrote in his article (https://medium.com/@osmantoplica/youve-got-the-wrong-company-brow-a69484724f12), Jackson Wong has got the wrong company; besides the fact that Kubi.com belongs to Coin (Chengdu) Technology Co., Ltd. anyway, as stated above, the domain www.kucoin.cn belongs to the registrant email admin@kucoin.com, like www.kubi.com.

If you reverse search the registrant mail from other KuCoin domains, you find, besides of a plenty of other (dead) domains, www.reiniot.com, one of his (Eric Don Tang Kes) “famous IT companies”, I know that China has their own platform for everything, so I cannot verify if this is a famous company or not, if someone is interested in researching more: the company itself is called something like “Chengdu Rui Yun Internet of Things Technology Co., Ltd.”.

However, in autumn 2017 KuCoin claimes they’ve moved to Hong Kong,

and that is not false, but not 100% right aswell. While as long as there is no plaintiff, there is no judge, I have serious concerns over KuCoin if China gets angry. I will explain why:

KuCoin CEO Michael Gan is the Representative of “KuCoin Co., Limited”, Company Registration №2588213

Their office in Hong Kong is at the following address:

FLAT/RM A 20/F KIU FU COMM BLDG, 300 LOCKHART RD WAN CHAI, HONG KONG, CN

Jackson claimed, that it’s just a virtual office; I’ve checked the address, this is the building: http://www.primeoffice.com.hk/hong-kong-office/7559/kiu-fu-commercial-building

I’ve asked a friend who is a businessman and often in HK, he confirmed that that’s a well-known address for virtual or serviced offices. (if you don’t know what this is, take a look here: http://www.servcorp.com/en/blog/office-space-rental/virtual-vs-serviced-offices-which-is-right-for-you/ )

Unfortunately it’s kinda obvious that KuCoin has no real office in HK and the company is more a shell company to not get in trouble with Chinese authorities.

@royaldutch posted pictures of him/them visiting the KuCoin office in HK, so either they were not in HK but in China, or KuCoin has at least a serviced office in case someone visits them in HK (while I’ve researched a bit more it turned out that this is highly unlikely):

Pictures: https://steemkr.com/cryptocurrency/@royaldutch/can-you-make-a-major-profit-with-kucoin-find-our-trade-recommandation-here

(especially the roof of the first picture of KuCoins office does not look like a room in a high-rise building, I cannot verify this though.)

At the other screenshot you see “Smart Team Secretary Limited”, which takes place at the same room as KuCoin Co., Limited (Room A Floor 20), it’s taken from the NNC1 incorporation form of KuCoin Co., Limited.

To understand it a bit better, here the blank form: https://www.cr.gov.hk/en/companies_ordinance/docs/NNC1_Specimen-e.pdf

So “Smart Team Secretary Limited” is the Company Secretary and therefore the body corporate of KuCoin Co., Limited.

Some more information about “Smart Team Secretary Limited”: http://en.smartteam.hk/order/

You can read there that it’s a Hong Kong based company specialized in creating offshore companies and bank accounts, including but not limited to tax heavens like Seychelles, Cayman Islands and Belize. Their head quarters are in the same room as KuCoin Co., Limited claims to be, so there is absolutely no way that KuCoin has more than a mailbox there. As you can see on point 19 at the blank NNC1 form, Non-Hong Kong addresses are not accepted, therefore KuCoin needed a service like that as they have no Hong Kong residence.

As I’ve already mentioned above, as long as there is no plaintiff, there will be no judge; however, the question is what will happen if China gets serious. Companies created like this hang on a thread, especially if they have to do something with financial services and even more with cryptos in China.

Finally I want to write down a positive point: Their servers are not positioned in China but in Japan (AWS):

54.92.111.25

https://urlscan.io/domain/ec2-54-92-111-25.ap-northeast-1.compute.amazonaws.com

Conclusion: What KuCoin is doing is very shady business. All in all the company in HK is not more than a shell company, trying to avoid the Chinese laws. HK has different laws and regulations than China, however it’s still a part of China; if the government wanted to do something, they still could. While right now KuCoin is still a pure digital currency exchange, they are missing any KYC / AML; that might not be forbidden right now but will definitely get them in the focus of the authorities. Even though I am skeptical about KuCoins business model (i. e. I wonder if they can survive long-term, they even stopped the referral program yesterday), I like the idea behind it, also the exchange itself is very well done. I can imagine KCS getting pumped more, however you should keep in mind that KCS only purpose are the dividends, once this would not work anymore, they would crash down like BCC did (I don’t want to impute KuCoin to be an intentional scam like BCC, but they seem to be very young and might not have the experience in setting up a business used by millions of people). One of my reasons to go into crypto was that I just didn’t want to let banks hold more than necessary of my money; if I make a loss because of price fluctuations, I want it at least to be devalued in my own wallet. But KuCoin is not even a bank, all in all they are a non-regulated shell company, though with a motivated but very young team (it doesn’t mean that young teams or in this case the KuCoin team is bad, but when it goes to crypto even high experienced entrepreneurs might have their problems). And to get out an appreciable dividend, we need to deposit at least around 50.000 US$ at KuCoin — and that I am just not willing to do anymore.

However I wish both, KuCoin founders and KCS “investors”, good luck for the future and thanks for reading.

Thanks to @jacksongwong2244 for helping me out understanding some things.