CoinTelegraph
A Seychelles court has ordered KuCoin entities to pay a Swiss investor more than $2 million after ruling the exchange could not classify 21 million delisted CHP tokens as "abandoned" property. The judgment is a rare instance of a foreign court directly piercing the liability shield crypto exchanges typically invoke when delisting low-liquidity tokens.
Why it matters
Exchanges routinely delist tokens with minimal notice and have historically treated residual user balances as forfeit after a grace period. This ruling challenges that practice at the judicial level, establishing that a unilateral "abandoned" classification does not extinguish an investor's ownership claim. If the precedent travels — particularly to jurisdictions with more enforcement muscle than the Seychelles — it could force exchanges globally to revisit how they handle delisted token balances and the disclosures that accompany them.
Market impact
KuCoin has not responded to requests for comment and, according to the investor, has yet to satisfy the court order. The investor is now preparing further legal action, which may include enforcement proceedings in additional jurisdictions. For KuCoin specifically, the unresolved judgment adds to an already pressured legal profile following its 2024 U.S. DOJ settlement. Traders holding balances on centralised exchanges in tokens with thin liquidity should treat this case as a live signal about counterparty risk.
Frequently asked questions
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Why did the court reject KuCoin's "abandoned" token classification?
The Seychelles court ruled that KuCoin could not unilaterally declare the investor's 21 million delisted CHP tokens abandoned, finding that the classification did not extinguish the investor's legal ownership claim over the assets.
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What further action is the Swiss investor taking after KuCoin failed to pay?
The investor is preparing additional legal action following KuCoin's non-payment of the court-ordered $2 million judgment, which may include enforcement proceedings in other jurisdictions.
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What does this ruling mean for users holding balances in delisted tokens on centralised exchanges?
The case signals that exchanges may face judicial liability for how they handle delisted token balances, suggesting traders in low-liquidity tokens on centralised platforms carry meaningful counterparty risk if delistings are mishandled.
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