Coinspeaker
Analysts Say KuCoin Remains Fine amidst Criminal Allegations
Analysts at the blockchain analytics company CryptoQuant have assured users that KuCoin is fine and standing strong despite the criminal allegations leveled against the company and two executives. In a recent social media post, Ki Young Ju, founder and CEO of CryptoQuant, said that KuCoin is “fine” based on on-chain metrics.
Sufficient Reserve to Honor Withdrawal Requests
After news broke about the lawsuit filed by the US Department of Justice (DOJ) and the Office of Homeland Security Investigations (HSI), users began withdrawing funds from KuCoin, fearing for the safety of their assets.
However, Young Ju disclosed that despite the increased withdrawal requests for Bitcoin (BTC) and Ethereum (ETH), KuCoin has sufficient reserves to fulfill withdrawal requests.
On-chain wise, @kucoincom is fine.$BTC and $ETH withdrawals surged, driven mainly by retail users, with a small impact on the overall reserve.
They appear to not commingle customers' funds and have sufficient reserves to process user withdrawals. pic.twitter.com/p4bJJpwnFJ
— Ki Young Ju (@ki_young_ju) March 27, 2024
On Tuesday, March 26, users withdrew more than $200 million from KuCoin, according to a post on X from blockchain firm Nansen. The company said that the users withdrew $99 million in Ethereum and $109 million across EVM chains.
“Since the news broke about @kucoincom and two of its founders being charged with violating anti-money laundering laws by US federal prosecutors, there has been an increase in withdrawals -$99m on Ethereum and -$109m across EVM chains,” said the company.
KuCoin Has $5 Billion in Reserve Portfolio
While some users successfully withdrew their funds from KuCoin, others expressed concern about the platform’s solvency.
One user complained on X that he was unable to withdraw his funds on the platform following the news of the lawsuit. He also cautioned other traders to act fast and withdraw their money from KuCoin before it turns into an FTX-like situation.
Meanwhile, despite the substantial BTC and Ether outflows from the exchange, Scopescan data shows that as of March 27, the company still has a strong reserve portfolio of $4.813 billion.
The exchange has a total of $373.166 million worth of Ether, including $975 worth of Tether’s stablecoin USDT and $232.02 million worth of its native token KCS.
Lawsuit Allegations
In the lawsuit against KuCoin, authorities had claimed the exchange commingled users’ funds and facilitated the laundering of over $5 billion in suspicious funds through deposits and $4 billion via withdrawals, bringing the total to $9 billion.
Additionally, the DOJ and the HSI alleged that the company operated an unregistered platform in the US. KuCoin was also charged with violating anti-money laundering (AML) rules.
The exchange had previously settled with New York Attorney General Letitia James for operating an unlicensed platform in the jurisdiction. The company paid $22 million in fines in December 2023 to resolve the case and depart from the city.
Analysts Say KuCoin Remains Fine amidst Criminal Allegations
