ZachXBT

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Onchain investigator ZachXBT has accused KuCoin of failing to assist hack victims and law enforcement, reviving scrutiny over how quickly centralized exchanges respond when stolen crypto reaches deposit addresses.
The latest clash started after X user WartelWawa said their wallet had been drained by hackers and offered ZachXBT $100,000 to track the attackers. ZachXBT <a href="https://x.com/zachxbt/status/2057677038396559502?s=20" rel="noopener noreferrer nofollow">accuses KuCoin of not assisting victims or law enforcement</a>, saying he had reported similar issues before and sharing screenshots that appeared to show previous stolen-fund flags going unanswered.
The allegation hits a sensitive part of crypto crime response. Victims often have only a short window to act after funds leave a self-custody wallet. Once stolen assets reach an exchange deposit address, the recovery path depends on fast tracing, account freezes, law-enforcement contact and compliance cooperation. Delays can leave funds moving through swaps, internal transfers, laundering services or withdrawal routes before a freeze request is processed.
ZachXBT has repeatedly targeted exchange and routing layers in recent investigations. A recent <a href="https://cryptoadventure.com/zachxbt-traces-92m-laundering-trail-after-150m-dsj-ponzi-collapse/" rel="noopener noreferrer nofollow">DSJ and BG Wealth Sharing laundering trail</a> showed how quickly stolen or investor-linked funds can move across chains, services and custodial endpoints after a collapse. He also helped in the recent <a href="https://cryptoadventure.com/polymarket-recovery-effort-freezes-164k-after-internal-wallet-breach" rel="noopener noreferrer nofollow">Polymarket recovery push</a> after investigators and service providers froze part of the funds tied to the platform’s internal wallet breach. The KuCoin dispute puts the same pressure on centralized exchange response times.
<h2 id="past-stolen-fund-claims-add-pressure">Past Stolen-Fund Claims Add Pressure</h2>
The latest accusation follows earlier criticism tied to a fake Ledger app that drained crypto from more than 50 victims. In April, ZachXBT linked more than <a href="https://news.bitcoin.com/zachxbt-says-apple-app-store-fake-ledger-app-stole-9-5m-from-50-victims-in-one-week/" rel="noopener noreferrer nofollow">$9.5 million in stolen funds to over 150 KuCoin deposit addresses</a>, while also alleging that another threat actor laundered about $3.5 million from a separate Bitcoin Depot-related incident through more than 25 KuCoin deposit addresses.
That earlier case made KuCoin part of a broader debate over whether exchanges can freeze suspicious flows fast enough when attackers use many deposit addresses, instant-exchange routes and high-volume laundering services. The new WartelWawa case has reopened that debate because the complaint is not only about tracing funds. It is about whether exchange-side cooperation happens quickly enough for victims and police to recover anything meaningful.
Authorized investigators can submit account-data and freeze requests through KuCoin’s <a href="https://www.kucoin.com/support/47497300093767" rel="noopener noreferrer nofollow">law-enforcement request system</a>, using proof of authority, government-domain contact details, transaction hashes, wallet addresses, flow-of-funds information and specific freeze instructions.
Legal verification helps exchanges avoid acting on bad or fraudulent reports, but active theft cases move on a different clock. The difference between an immediate freeze and a delayed review can decide whether funds remain recoverable.
<h2 id="compliance-scrutiny-remains-heavy">Compliance Scrutiny Remains Heavy</h2>
KuCoin’s regulatory position adds another layer to the dispute. KuCoin EU secured a <a href="https://www.kucoin.com/blog/en-kucoin-secures-landmark-micar-license-expanding-regulated-digital-asset-services-across-europe" rel="noopener noreferrer nofollow">MiCAR authorization in Austria</a>, giving its European entity a regulated footing across much of the EEA. Austria’s FMA later <a href="https://www.fma.gv.at/en/fma-prohibits-kucoin-eu-exchange-gmbh-from-conducting-new-business/" rel="noopener noreferrer nofollow">prohibited KuCoin EU from conducting new business</a> until key anti-money-laundering and sanctions-compliance functions were appropriately filled, with KuCoin EU lodging appeals against parts of the administrative process.
The exchange has also faced heavy U.S. pressure. KuCoin pleaded guilty in January 2025 to operating an unlicensed money transmitting business and agreed to pay nearly <a href="https://www.reuters.com/technology/kucoin-pleads-guilty-agrees-pay-nearly-300-million-us-crypto-case-2025-01-27/" rel="noopener noreferrer nofollow">$300 million in fines and forfeitures</a>, while prosecutors said prior <a href="https://cryptoadventure.com/can-crypto-have-both-privacy-and-compliance/" rel="noopener noreferrer nofollow">AML and KYC</a> failures allowed suspicious transactions to move through the platform.
ZachXBT’s latest criticism now puts the issue back in user-facing terms: when stolen funds hit a major exchange, victims want fast freezes and police want usable account data. KuCoin’s formal request system exists, but the pressure point is execution speed. The next meaningful response would be a clear statement on the WartelWawa case, the flagged deposit addresses, whether any funds were frozen, and how emergency theft reports are handled before stolen assets leave the exchange environment.
The post <a href="https://cryptoadventure.com/zachxbt-accuses-kucoin-of-ignoring-hack-victims-and-police/" rel="noopener noreferrer nofollow">ZachXBT Accuses KuCoin Of Ignoring Hack Victims And Police</a> appeared first on <a href="https://cryptoadventure.com" rel="noopener noreferrer nofollow">Crypto Adventure</a>.

ZachXBT Accuses KuCoin Of Ignoring Hack Victims And Police

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