With court ordering temporary injunction, KuCoin in lockdown of a different kind

More mystery shrouds the cryptocurrency firm in terms of investors

By order of the High Court of Singapore, KuCoin.com, the primary web domain of cryptocurrency exchange KuCoin, has been locked since 24 March, when the court issued a temporary injunction on barring KuCoin from moving its assets, including its website, from the country. A 30 March email from domain registrar GoDaddy provided to Cointelegraph shows that GoDaddy is complying with the court order.

KuCoin meanwhile is undergoing a major corporate restructuring and faces legal challenges around the globe.

Founded in 2017, KuCoin announced it had five million users in 100 countries within a year. Then a year later, KuCoin claimed it had secured $20 million in Round A funding from venture capitalists—IDG Capital, Matrix Partners and Neo Global Capital. But at least one of those investments did not materialize.

“The combined forces of IDG Capital, Matrix Partners and Neo Global Capital (NGC) will help KuCoin grow substantially, expand understanding and adoption of cryptocurrency for millions of potential users, and help these users more efficiently find the best products available in the crypto-world no matter where on the planet they may exist,” said KuCoin CEO Michael Gan.

IDG Capital has well known cryptocurrency companies such as Coinbase and Ripple in its investment portfolio. As of publication of this article, KuCoin appears as a portfolio company on the websites of both IDG Capital and Neo Global Capital, but does not appear on Matrix Partners’ website.

Now comes news from various sources that NGC never made any investment in KuCoin, and only gave logistical support to the exchange.

US-based law firm Schall has announced its investigation into KuCoin and another exchange accused of “false and misleading statements to account holders” in a pending class action

In March, KuCoin issued a press release from Victoria, the capital city of the Seychelles, describing a sweeping corporate restructuring. It announced the establishment of KuGroup, which “consists of three business groups, namely KuCoin Global, KuCloud and the KuChain & KCS Business Group”.

This announcement came just before US-based law firm Schall announced its investigation into KuCoin and another exchange accused of “false and misleading statements to account holders” in a pending class action. The exchange is also the subject of a separate class action bought by Chase Williams in the Southern District Court of New York regarding the selling of unregistered securities.

Meanwhile, the court order that prevents KuCoin from moving its domain to another provider, and potentially outside the jurisdiction of the Singaporean Court, involves a cybersecurity provider who is suing the cryptocurrency exchange.

For the past year, KuCoin users have been turning to Reddit to understand the company’s corporate structure, lacking clarity from the exchange itself.

Now, with the co-founders of KuCoin and PhoenixFin Pte Limited no longer at the company, new directors such as Chinese resident You Au were appointed. In November 2019 the ownership of PhoenixFin Pte Limited was transferred from PhoenixFin Limited, a Cayman-based holding company, to You Au. He had been appointed to the board at the time of the October 14 corporate restructuring, but his prior relationship to KuCoin is unclear. He is not mentioned on the exchange’s website, in any of its marketing material, even in the March press release, or in the 2017 White Paper which described the exchange.

Little is known about You Au, except that he is 28 years old and officially a resident in Mianyang, a city in the Sichuan province of China.

In 2018, KuCoin responsed to an “empty office” claim regarding a Hong Kong address, asserting that its operational headquarters were in fact in Singapore, stating it was merely a mailing address of one of KuCoin’s many subsidiary companies. “KuCoin Headquarters is in Singapore. KuCoin has always been a global firm, with over 300 employees and four major offices in China, the Philippines, Singapore, and Thailand,” said a press release from the company.

The exchange’s current geographic situation is less clear. On its website, the company profile states it “operates in the Seychelles,” a jurisdiction not mentioned in its 2018 blog post.


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