Traders Sound the Alarm on KCEX's "Changing Practices", Hidden "Risk Control" Restrictions, and Suspected Bonus Scam

A trader has voiced significant frustration with KCEX through a complaint submitted with BrokersView, alleging that his 1050 USDT has been unjustly frozen due to supposed "abnormal behavior" in his account triggering risk control restrictions. 

Despite having completed full KYC verification and previously withdrawing large sums without any issues, the client claimed that KCEX was demanding additional documents this time, including hand-held photos and proof of funds. The client found these additional requests excessive and refused to comply, resulting in a seven-day waiting period for account review for his withdrawal of funds, which he deemed unreasonable.

The client further indicated that this situation arose following KCEX’s promotion of 0% withdrawal fees. He warned others to be cautious of what they perceive as changing and potentially unreliable practices by the exchange. 

The client appears to have failed to withdraw his funds as after more than 7 days he requested that we expose the incident.

The client's experience highlights the lack of transparency and consistency in KCEX’s KYC policies and claimed offers.

Inconsistencies in the KYC requirements have also been reported by another KCEX client, who alleged that his $1,600 deposit was unjustly held and his withdrawal got blocked. According to the client, KCEX demanded additional national documents that were not required during the initial sign-up process.

Traders: Beware of “Risk Control” and Bonus Scam

Many traders have reported similar issues to those mentioned by the complainants above, with particular problems arising from promotional bonuses and "Risk Control" failures. 

KCEX's promotions of futures trading bonuses have been criticized on forums by traders who were unable to withdraw their funds and were debunking the alleged legitimacy of the exchange.

Some traders reminded individuals to watch out for the “abnormality in Risk Control” error they received and the suspicious KYC of KCEX.

Legitimacy Concerns about KCEX

KCEX presents its license information on its website, showing its registration as a Money Services Business (MSB) under the Financial Crimes Enforcement Network (FinCEN) of the US Department of Treasury. Our search finds a matching record. However, the registration only indicates that the crypto exchange has met certain regulatory requirements and must comply with anti-money laundering (AML) regulations, recordkeeping, and reporting requirements. This does not equate to holding a crypto "license".

As is well-known, crypto regulation remains unclear worldwide. In the U.S., there has yet to be a single federal regulator that issues licenses specifically for crypto exchanges, and crypto businesses are conducted in compliance with specific state-level regulations.

KCEX says it “is proud to showcase its array of regulatory licenses”, but no additional licenses are presented. Therefore, FinCEN’s MSB is not sufficient to prove KCEX’s legitimacy in operating as a cryptocurrency exchange. This always poses risks of potential fraud, misconduct, and irresponsibility to traders.