Kucoin suspends operations for some Brazilian customers. The question is what central banks require of capital.

Some Kucoin customers in Brazil have been experiencing problems with withdrawals and deposits on the platform for nearly three weeks. The broker confirmed the problem to Portal do Bitcoin, indicating that the delay in processing operations was caused by the new compliance policy adopted by Capital, which is responsible for deposits and withdrawals of reals on KuCoin in accordance with central bank requirements.

Two Kucoin customers contacted Bitcoin Portal to report the issue. One person, who asked that her name not be published, deposited money into her account through TED, a process she said she had done dozens of times. However, the money stayed the same, and only the message ‘Processing’ appeared on the platform.

He continued, “It turns out that there are other colleagues who are experiencing the same situation. “We have been unable to find a solution for over 20 days, with funds being held illegally,” he said.

Another brokerage customer consulted in the report claimed to have faced the same problem and was not the only one. “Many Kucoin users are scared because they don’t know where their resources are going. High values ​​are missing or blocked. “This is an insulting attitude because there is no legal permission for this.”

What does KuCoin say?

Contacted by the report, Diego Santos, community manager for Kucoin in Brazil, explained that Capital and Banco S2 have created a new compliance policy to meet central bank requirements on combating money laundering and terrorist financing.

“Some users who moved larger amounts were flagged and some additional documentation was requested. For those who meet requests and comply with compliance requirements, operations will fully resume with both deposits and withdrawals made in BRL,” says Santos.

Additionally, according to the community manager, for customers whose operations are rejected, do not meet the requirements, or exceed the information transmission period, the operations “will be automatically canceled and the money will be automatically returned to the respective bank account.”

Kucoin said that all pending transactions will be processed by the end of this Tuesday (5) and that it is working with Capital to “create a more efficient flow for loading additional documents that is more accessible to both teams.” It’s about making the process faster.

Customers are angry due to lack of communication

In the Telegram customer community, a user left a reply to the KuCoin community manager expressing dissatisfaction with the company’s explanation.

“If you’re going through this trouble, why didn’t you just stop real deposits until this case was resolved? This causes inconvenience to customers and creates distrust in the brokers who have always paid their bills,” he complains.

Finally, this customer says deposits should stop “immediately after the policy change.”

In response to the report’s question about why the policy change was not previously disclosed to customers, a Kucoin representative responded, “The implementation of the new compliance policy reflects Capitual’s partner banks and is consistent with their own policies. Since then, KuCoin and Capitual’s technology The team has been working hard to build new control mechanisms and processes for these scenarios.”

Another Telegram group comprised of injured Kucoin customers reported that several users had already started receiving solutions to their issues by the end of Tuesday afternoon. But after some congratulations, one of them asked, “Who will ever trust Capital again?” Soon after, this message received a reply: “Who would trust KuCoin?”

Capital promises a solution by the end of the day.

Capital also became aware of the problem after contacting Portal do Bitcoin. Company spokesman Gustavo Rezende emphasizes that this is not a central bank requirement for specific users, but “a standard that already exists in the central bank guidelines on financial monitoring policies for illegal activities.”

The payment gateway company created a note to explain what happened. The company notes that it is “improving its compliance systems and practices” and in this context is “requiring proof of source of funds for transactions exceeding a certain value on the platform in line with best international compliance practices.”

The company guarantees that all outstanding issues will be resolved by the end of this Tuesday and that customers who cannot prove the source of their money will have the money returned to their accounts. Operations on Kucoin are prohibited until you prove the legitimacy of your capital.

Finally, Capitual asks customers who have funds pending confirmation to check their inbox to find an email from their partner broker or email containing instructions for proving the source of their funds. The company states that customers who do not submit supporting documents can receive a refund for the amount sent within 48 hours of business hours.

Binance and Capital Case

In 2022, Binance broke off its partnership with Capital due to the demands central banks began imposing on payment processors.

Capital said it needed more information about depositors to comply with central bank obligations, which at the time had begun to require individualization of customer accounts. However, Binance had a different interpretation of BC’s request and decided not to follow Capital’s new policy.

Binance accused Capital of creating obstacles that were not real. This left the world’s largest brokerage firm without deposits and withdrawals in Brazil for several weeks.

Also Read: Capital Accuses Binance of Unlocking Suspected Fraudulent Accounts

Currently, the two companies are fighting in court over 430 million reais worth of Binance customer funds held by Capital. Last November, the court upheld the understanding that Binance would not have access to these funds until the process was completed.

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Kucoin suspends operations for some Brazilian customers. The problem may be the central bank’s demand for Capital appeared first on Portal do Bitcoin