KuCoin EU barred from onboarding new EU customers after compliance staff departures
Austria’s financial regulator (FMA) has ordered KuCoin EU to stop onboarding new customers and offering new products after the exchange lost key compliance staff shortly after receiving a Markets in Crypto Assets (MiCA) licence in November. The FMA said KuCoin EU no longer has appointed officers for anti-money laundering (AML), terrorism financing prevention, and sanctions compliance — roles required under MiCA and Austria’s Financial Markets Anti-Money Laundering Act. The prohibition remains in place until KuCoin EU appoints an AML officer and deputy, plus a sanctions compliance officer and deputy. KuCoin EU said it is expanding its compliance team in Austria and hiring experienced local compliance professionals to meet European regulatory expectations. Austria has become a hub for crypto firms seeking EU passports under MiCA, with exchanges such as Bitpanda, Bybit and Bitget also basing operations in Vienna. Key points for traders: the action restricts KuCoin EU’s ability to onboard EU customers and launch new EU-facing products until compliance hires are confirmed; it may limit EU inflows to KuCoin’s EU entity and could shift some trading volume to other EU-licensed exchanges. Monitor announcements from the FMA and KuCoin for timelines on rehiring and any limits on existing customer services that could affect liquidity or order flow.
Bearish
Regulatory enforcement that restricts an exchange’s ability to onboard new customers is typically bearish for that exchange’s short-term liquidity and order flow. KuCoin EU’s prohibition on new business reduces potential fiat and crypto inflows into its EU entity, may deter institutional counterparties from routing orders there, and could divert retail volume to other EU-licensed exchanges (e.g., Bitpanda, Bybit EU, Bitget). Short-term effects: lower liquidity and wider spreads on KuCoin EU order books, potential withdrawals or lower activity from EU users, and localized price impact for assets with concentrated volume on KuCoin EU. Market confidence in the exchange’s EU operations may decline until hires are confirmed. Long-term effects: if KuCoin fills the roles promptly and demonstrates stronger compliance, the firm could restore access and credibility — a neutral-to-positive outcome over months. However, repeated or prolonged compliance failures historically correlate with sustained volume loss and reputational damage (examples: past enforcement actions against other exchanges leading to market share erosion). Traders should watch official FMA updates and KuCoin hiring announcements; any extension of restrictions or additional sanctions would increase negative pressure, while rapid remediation would cap damage and normalize trading conditions.