The Hong Kong Monetary Authority (HKMA) has raised concerns over an unregulated cryptocurrency exchange named “Kucoin,” which is allegedly demanding payments to release funds from frozen accounts.

In a public advisory released on the official website of the Government of the Hong Kong Special Administrative Region, the HKMA highlighted deceptive practices attributed to the crypto exchange. The warning underscores reports of Kucoin falsely claiming to be regulated by the HKMA and issuing fraudulent documents purportedly from the regulatory body. These documents allegedly demand payment of fees to unlock funds from frozen accounts.

While the warning does not explicitly name KuCoin, it coincides with the recent withdrawal of the exchange's application for a virtual asset trading platform (VATP) license in Hong Kong. Despite this, KuCoin has not issued any public statements addressing the HKMA’s advisory.

The HKMA emphasized its lack of affiliation with the crypto exchange and reiterated its policy of not contacting individuals regarding personal financial matters.

This advisory comes on the heels of legal troubles faced by KuCoin, with the U.S. Department of Justice suing the exchange and its founders, Chun Gan and Ke Tang, for alleged violations of the Bank Secrecy Act. The lawsuit accuses KuCoin of facilitating unlawful money transfers associated with money laundering activities. Both Gan and Tang, who are Chinese citizens, remain at large, facing potential imprisonment of up to 10 years if convicted.

Following news of the lawsuit, customers withdrew over $350 million from KuCoin. Despite assurances from company officials regarding the safety of assets, the incident has raised significant concerns about the security and legitimacy of the exchange's operations.