Following the US authorities’ criminal charges against KuCoin, the embattled crypto exchange faced a surge in withdrawal requests from various categories of traders. Data from DefiLlama, Nansen, and SpotOnChain indicated a significant increase in withdrawals, including whales, funds, smart money, and market makers.
During the reporting period, SpotOnChain reported withdrawals totaling around $500 million, with a breakdown that included $274 million USDT, 15,500 ETH (approximately $55 million), 50 million ONDO tokens (approximately $46 million), and 12 million FET ($34 million). Similarly, the 0xscope dashboard revealed total net outflows from KuCoin amounting to $520 million.
Despite the surge in withdrawals, users reported delays, raising concerns reminiscent of the FTX collapse. However, CryptoQuant CEO Ki Young Ju reassured the public by stating that KuCoin has sufficient reserves to process withdrawals and does not mix customers’ funds. He emphasized that the platform is in good shape on-chain wise, with an overall positive outlook on its reserve capacity.
According to DefiLlama CEX transparency dashboard, KuCoin’s wallets still hold assets worth $3.68 billion as of the latest update. CEO Johnny Lyu commented on the legal battles, stating that they are not uncommon in emerging industries. He highlighted the importance of regulatory compliance and standardization as the industry matures, pointing out that KuCoin recently became the first global exchange to register in India.
Lyu reassured users that the exchange continues to operate optimally despite the legal challenges. He mentioned that the firm’s lawyers are investigating the details of the allegations in order to address them appropriately. He emphasized the exchange’s proactive approach to compliance and respect for local regulations, positioning KuCoin as a leader in regulatory adherence within the industry.
The aftermath of KuCoin’s legal troubles has led to a surge in withdrawal requests from various traders. Despite concerns and delays reported by users, the exchange has maintained its operational capacity and regulatory compliance standards. As the industry continues to evolve, platforms like KuCoin are navigating through legal challenges while striving to uphold transparency and accountability in their operations.