From their TOS (source https://xapo.com/terms/ )
Quote
Xapo is incorporated in Hong Kong , has an office in Palo Alto, California and operates Worldwide.... ...If you are using our Services in the United States, you are engaging not with Xapo Limited but with Xapo, Inc., a Delaware corporation and a wholly-owned subsidiary of Xapo Holdings Limited
so using their service from EU i still feel legal 
Xapo, Inc is NOT registered as money transmitter in Delaware nor in any other stare, so it is operating illegally.
Source 
it's not how you feel, it's about how they are. Even in Hong Kong, they need a financial license to operate with Bitcoin. They have not.
Xapo, Inc is NOT registered as money transmitter in Delaware nor in any other stare. You can check that with Delaware's Office of State Banking Commissioner.
Xapo is illegal.
Hey bud you need to give us source if you have proven accusations. I can believe you saying xapo is illegal but you need to bring us proofs of it, even as community service if you believe that. You cant say "they are not registered anywhere" because that would imply us going to check any license office in the world and it is not a walkable path. Please if you have proofs xapo is illegal, give us evicendes.
Thank you