Summary of Custody Policy

Summary

Custody & Administration Policy

 

1. Overview and Purpose

KuCoin EU Exchange GmbH ("KuCoin EU") is a licensed crypto‑asset service provider ("CASP") under the Markets in Crypto‑Assets Regulation ("MiCAR") and authorized to provide the regulated Crypto‑Asset service of providing custody and administration of Crypto‑Assets on behalf of clients (Art 3 para 1 no 17 MiCAR).

KuCoin EU considers the protection of Users' Crypto-Assets as its highest priority. Therefore, and as required under MiCAR, KuCoin EU has in place a comprehensive Custody and Administration Policy ("Policy") setting out how the custody and administration services are performed by KuCoin EU. Following Art 75 para 3 MiCAR, KuCoin EU makes a summary of this Policy (this document, "Summary") available to its Users ("Users", "you", "yours") in an electronic format.

This Summary provides an overview of KuCoin EU’s custody and administration services, including the safeguards protecting Users’ Crypto‑Assets, Users’ rights, and the applicable ICT and outsourcing framework.

However, Users should not only rely on this Policy but review General Terms as well as the Custody Agreement to understand the contractual basis of the Crypto-Asset service.  

2. Custody and Administration Services 

KuCoin EU offers its Users a comprehensive full‑service custody solution ("Custody Service"), acting as a custodian (Verwahrer). Users transfer their factual control of their Crypto-Assets to KuCoin EU, which holds the means of access (e.g. private keys). Consequently, Users do not retain self‑custody of their safekept assets.

Through the KuCoin EU Platform, KuCoin EU offers various Crypto‑Asset services that may require the use of Users’ assets. For this purpose, KuCoin EU securely administers Users’ Crypto‑Assets under its custody ("Administration Service").

Administration Services are performed only upon the User’s explicit instruction. KuCoin EU does not act at its own discretion and does not use Crypto-Assets under custody for its own purposes. These Administration Services include on‑platform use (e.g., exchanges), intra‑platform User‑to‑User transfers and external on‑chain transfers to the User's or third‑party’s wallets (e.g. withdrawal).

3. Safekeeping and Segregation

KuCoin EU adheres to stringent legal and operational segregation measures to protect Users’ Crypto-Assets under the Custody and Administration Service by operating a multilayer IT infrastructure. Users’ Crypto-Assets are safekept within dedicated "Custodial Wallets" that may hold Crypto-Assets of multiple Users.

Users’ Crypto-Asset "Deposits" are credited only after (i) capture and control within the Custodial Wallet Solution, (ii) sufficient block confirmations, and (iii) successful Anti-Money Laundering ("AML") and Combating the Financing of Terrorism ("CTF") checks. Once credited to the User’s account within the Off‑Chain Ledger System, the Crypto- Assets fall under the Custody & Administration Services. KuCoin EU may reject deposits where required compliance checks cannot be satisfied.

Users may withdraw their Crypto-Assets, subject to completion of AML & CTF checks, to an external wallet at any time. In emergencies or crisis situations, emergency plans are in place to ensure the return of User's Crypto-Assets within a reasonable timeframe.

KuCoin EU can always identify each User's precise share of the collectively held Crypto-Assets. A dedicated "Off-Chain Ledger System" records, in real time, each User’s share, captures all relevant transactions and transfers, and calculates live client balances.

Through a combination of different wallet types, i.e. "Hot Wallets" and "Cold Wallets", the "Custodial Wallet Solution" maintains high security and User Crypto‑Asset protection standards while keeping Users’ assets readily available for withdrawals.

Custodial Wallets exclusively store Users' Crypto-Assets. KuCoin EU's proprietary Crypto-Assets are held within a separated wallet infrastructure. To ensure and maintain strict separation between Users’ assets and KuCoin EU's proprietary Crypto-Assets, regular on-chain netting procedures are performed based on real-time Off-Chain Ledger System data.

The Custody Services are governed by a dedicated "Custody Agreement" (forming part of KuCoin EU's General Terms). The Custody Agreement establishes the legal framework under which You as a User remain the legal and beneficial owner (rechtlicher und wirtschaftlicher Eigentümer) of Your Crypto-Assets while KuCoin EU acts as custodian (Verwahrer) and is the holder (Inhaber) of Your Crypto-Assets.

Together, the Custodial Wallet Solution and the Custody Agreement are designed to ensure secure safekeeping through legal and operational segregation and strict on‑chain separation from KuCoin EU's proprietary Crypto-Assets, thereby protecting User's rights to their Crypto‑Assets, including in the event of KuCoin EU's insolvency.

4. Operational and security-related Aspects

KuCoin EU provides Custody and Administration Services through a mix of automated processes and supervised manual workflows, supported by a comprehensive ICT and operational risk‑management framework designed to meet MiCAR and DORA[1] requirements. Its custody‑specific risk and compliance framework aligns with KuCoin EU’s enterprise‑wide arrangements to ensure consistent standards in identifying, assessing, and mitigating risks, while addressing factors unique to safeguarding and administering users’ crypto‑assets.

KuCoin EU provides ongoing staff training and education to ensure personnel awareness of responsibilities when exercising control over Users’ assets and familiarity with all relevant infrastructure, systems, and safeguards.

The Custodial Wallet Solution and all systems required for Custody and Administration Services are subject to strict access restrictions, necessity-based authorization requirements, and control measures (including least privilege assignment, separation of duties, monitoring, and logged actions).

All operational and security processes and safeguards are subject to reporting and documentation requirements to ensure full accountability across responsible personnel and departments, including comprehensive incident documentation, reconciliation testing, audit processes and record-keeping.

5. Ancillary rights conferred by Users' Crypto-Assets & Blockchain Forks

Users’ Crypto‑Assets may include ancillary rights or functionalities (e.g., staking or governance). While the assets are under custody, Users may not be able to exercise these rights independently because KuCoin EU holds and controls the assets.

Where technically and operationally feasible, KuCoin EU may make selected rights or functionalities accessible via the Platform or dedicated services. However, KuCoin EU does not guarantee access, and any facilitation must not compromise the security of the Custody or Administration Services.

Users may always withdraw their Crypto‑Assets to independently access any ancillary rights or functionalities.

"Blockchain Forks" are changes to the underlying blockchain that may create new versions of an existing Crypto‑Asset.

KuCoin EU is not committed to support forks by default. The support is contingent on a positive listing decision and the availability of technical and operational capabilities. KuCoin EU may, at its own discretion, decline support for any organizational, business, or economic reasons.

If KuCoin EU does not support a blockchain fork, Users cannot participate in it via the Custody Service. This may lead to a permanent loss of any newly created assets unless the relevant Crypto‑Assets were withdrawn beforehand. KuCoin EU will inform Users of the option to withdraw and aims to provide timely guidance on any required actions. However, unplanned forks may occur without sufficient advance notice, which can prevent prior communication.

6. Outsourcing Arrangements

KuCoin EU uses dedicated intra‑group and third‑party service providers to deliver selected technical/operational services that facilitate the Custody and Administration Services. All providers must fully comply with KuCoin EU's Outsourcing and Third‑Party Risk Management Policy as well as applicable data protection and business continuity requirements.

KuCoin EU does not outsource the direct safekeeping or administration of Users’ Crypto‑Assets. These services are provided exclusively by KuCoin EU, without appointing sub‑custodians under Art. 75(9) MiCAR. KuCoin EU retains full and sole control over all means of access to Users’ Crypto-Assets. No third party ever holds or controls them.

KuCoin EU remains ultimately responsible for all Custody and Administration Services provided to Users.

7. Types of Crypto-Assets

KuCoin EU offers its Custody and Administration Services for all listed Crypto-Assets on the Platform.

8. User Communication, Transparency and Educational Materials

Users receive free of charge electronic balance statements on their current Crypto‑Asset holdings every three months and upon specific request. Each statement is provided on a durable medium in an easily readable electronic format. Balance statements include the Crypto‑Assets concerned, their amounts, the current value in an official currency, and any exchange or transfer activity during the covered period.

KuCoin EU is committed to transparently informing and educating Users about the functionality, framework, and potential risks related to the Custody and Administration Services.  KuCoin EU disseminates educational materials and service‑specific information (including resources published on the KuCoin EU Platform) via multiple channels to effectively reach Users. These materials explain service delivery, Users' rights, and crypto-asset‑protection safeguards in a clear and accessible manner.