Austria has ordered tighter oversight of KuCoin EU compliance as the crypto platform faces restrictions following a shake-up in its regulatory team.
Summary
FMA orders halt to new business over missing key roles
Austria’s financial regulator, the FMA, has barred KuCoin EU from conducting new business and onboarding customers in the European Union, citing gaps in its compliance staffing. However, the exchange can continue servicing existing relationships under strict conditions.
According to the FMA, the Vienna-based arm of Kucoin no longer has suitable key function holders for anti-money laundering, terrorist financing compliance and financial sanctions roles. The freeze will remain in place until the company appoints the required staff and those appointments are vetted.
The regulator said KuCoin EU must now designate an anti money laundering officer and deputy, as well as a sanctions compliance officer and a sanctions compliance deputy. Moreover, all these functions must meet standards set under Austrian law and EU rules.
MiCA approval followed by staffing shortfalls
The move comes only months after the FMA granted Kucoin approval under the Markets in Crypto Assets regime. That kucoin mica approval was issued in November, giving the exchange a regulatory foothold to operate across the European Union under MiCA passporting rules.
When the license was granted, the FMA said the key functions of AML officer and sanctions compliance officer, together with their deputies, were properly filled in line with MiCA and the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz). However, those conditions are no longer being met, according to the regulator.
“According to the FMA’s knowledge, this is no longer the case,” the authority said in its latest statement. That said, the watchdog stressed that effective staffing of these roles is a core requirement for the orderly conduct of business under Austrian and EU financial rules.
Regulator’s wording and scope of the ban
In its notice, the FMA warned that “the effective staffing of these key functions is a prerequisite for the orderly conduct of business.” The agency added that KuCoin EU is “prohibited with immediate effect from concluding business relationships of any kind with new customers.”
The exchange is also banned from “concluding new contracts or new products within the scope of existing business relationships until these key functions have been appropriately filled.” Moreover, this prohibition applies to all product categories covered by the MiCA authorization.
This outcome underscores how crypto exchange compliance staffing is now central to supervisory expectations in the wake of MiCA. However, the FMA did not indicate any suspicion of wrongdoing, focusing instead on structural and governance gaps.
KuCoin response and governance plans
Kucoin said it is in the process of filling the affected positions as part of a broader expansion of its compliance team in Austria. The company framed the changes as an opportunity to strengthen its governance architecture and risk framework.
“Our priority in Austria is to establish a governance framework that reflects the expectations of European regulators and the responsibility we carry toward the EU market,” said Sabina Liu, managing director of KuCoin EU. Moreover, she linked the staffing drive to a long-term strategy for stability.
“By investing in experienced local compliance professionals, we are reinforcing a compliance-first operating model designed for long-term stability and transparency,” Liu added. That said, the company did not provide a timeline for when all key roles will be fully staffed.
Austria’s role in European MiCA passporting
Austria has emerged as a preferred base for crypto firms seeking to leverage European MiCA passporting from a single national license. Exchanges including Bitpanda, Bybit and Bitget have established operational hubs in Vienna to access the EU market.
The FMA’s action shows that kucoin eu compliance will be watched closely even after a MiCA permit is granted. However, the case also signals to other platforms that maintaining fully staffed compliance and sanctions teams is not a one-off requirement but an ongoing obligation.
For KuCoin EU, the immediate challenge is to restore its roster of key function holders in AML, terrorist financing prevention and sanctions oversight so that the onboarding freeze on new customers can be lifted.
Once those appointments are completed and validated by the FMA, the exchange should be able to resume growth plans under its EU MiCA license, provided it maintains the reinforced framework demanded by Austrian regulators.
