Unregulated cryptocurrency exchanges repeatedly cause problems for investors. In a recent lawsuit, a plaintiff is demanding the return of his cryptocurrencies from the trading platform KuCoin. The lawsuit is based on the allegation that KuCoin does not possess a license in Germany and is unlawfully refusing to return the plaintiff’s digital assets.
Unlicensed cryptocurrency exchange – a legal risk
KuCoin is one of the world’s leading cryptocurrency exchanges, but it is not licensed by BaFin in Germany. Nevertheless, the platform operates with a German-language service and allows investors to buy, trade, and store cryptocurrencies. Legal experts warn against using unlicensed platforms, as consumers often face difficulties enforcing their rights in the event of a dispute.
Tokens lost – who is responsible?
The plaintiff had transferred 253,900 CRO tokens to the platform. Due to an error, the transfer was processed via the wrong blockchain, leaving the plaintiff without access to his tokens. Although KuCoin would technically be able to restore them, the company refuses any assistance. The plaintiff is now suing for the return of the tokens or for financial compensation.
Legal situation: Licensing requirement for financial service providers
According to Section 32 of the German Banking Act (KWG), a license is required if a company offers financial services in Germany. Companies operating without a license are in violation of applicable law. The plaintiff argues that KuCoin, due to its services, qualifies as a financial services provider and is therefore subject to a licensing requirement.
Lawyer Cocron: “Consumers must be able to defend themselves”
“This case shows that consumer rights must also be protected in the crypto sector. Providers without a license are acting illegally and can be held accountable,” says lawyer István Cocron.
What can those affected do?
Cryptocurrency owners who have suffered losses through unlicensed platforms should have their options reviewed to determine if a refund is possible. The decision in these proceedings could have far-reaching consequences and offer investors better legal protection.
