Ethereum tokens lead KuCoin’s $500 million withdrawal spike post US charges Ethereum tokens lead KuCoin’s $500 million withdrawal spike post US charges
KuCoin CEO Johnny Lyu reassures the exchange users that the platform continues to operate normally.
2 min read
Updated: Mar. 27, 2024 at 10:17 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Embattled crypto exchange KuCoin endured a surge in withdrawal requests the past day after the US authorities levied criminal charges against the platform.
Data from various on-chain analytics firms, including DefiLlama, Nansen, and SpotOnChain, showed a surge in withdrawals across multiple categories of traders, including whales, funds, smart money, and market makers.
On March 26, the US authorities alleged that the exchange and its founders operated without proper legal permissions and violated bank secrecy and anti-money laundering (AML) laws.
KuCoin withdrawals
The exchange experienced significant withdrawals of Ethereum-based tokens during the reporting period.
SpotOnChain reported withdrawals totaling approximately $500 million, encompassing $274 million USDT, 15,500 ETH (approximately $55 million), 50 million ONDO tokens (roughly $46 million), and 12 million FET ($34 million), among others.
Similarly, the 0xscope dashboard places total net outflows from KuCoin at $520 million during the reporting period.
Additionally, blockchain sleuth LookonChain identified two whale accounts that collectively moved $86 million USDT to platforms like OKX and Bybit.
Amid the withdrawals, numerous users reported delays, sparking concerns reminiscent of the FTX collapse.
However, CryptoQuant CEO Ki Young Ju doused these worries, saying the platform possesses adequate reserves to process withdrawals while emphasizing that KuCoin does not mix customers’ funds.
He said:
“On-chain wise, KuCoin 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.”
DefiLlama CEX transparency dashboard shows that the exchange’s wallets still hold assets worth $3.68 billion as of press time.
Touts compliance
KuCoin CEO Johnny Lyu said the exchange’s legal battles are not unique but “typical growth and regulatory issues encountered by emerging industries.”
According to him:
“Early-stage development often sees regulatory gaps, but as the industry matures, we move towards and embrace compliance and standardization.”
He pointed out that the platform recently became the first global exchange to register in India, adding that this reflects the platform’s “respect for local regulations and a proactive approach to compliance.”
Lyu reiterated that the exchange continues to operate optimally and that the firm’s lawyers were investigating the details of the allegations.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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