The recent criminal charges levied against KuCoin by US authorities have resulted in a significant surge in withdrawal requests from the platform. Data from various on-chain analytics firms such as DefiLlama, Nansen, and SpotOnChain indicate that traders across different categories, including whales, funds, smart money, and market makers, have been withdrawing their assets en masse.
During the reporting period, KuCoin experienced substantial withdrawals of Ethereum-based tokens. SpotOnChain reported withdrawals totaling approximately $500 million, which included $274 million USDT, 15,500 ETH (approximately $55 million), 50 million ONDO tokens (roughly $46 million), and 12 million FET ($34 million). Similarly, the 0xscope dashboard recorded total net outflows from KuCoin at $520 million.
Amid the withdrawal frenzy, numerous users reported delays in processing their withdrawals, raising concerns similar to those seen during the FTX collapse. However, CryptoQuant CEO Ki Young Ju reassured users by stating that KuCoin has sufficient reserves to process withdrawals and does not commingle customers’ funds.
According to DefiLlama’s CEX transparency dashboard, KuCoin’s wallets still hold assets worth $3.68 billion as of press time. CEO Johnny Lyu attributed the platform’s legal issues to typical growth and regulatory challenges faced by emerging industries. He emphasized KuCoin’s proactive approach to compliance, highlighting the platform’s recent registration in India as an example of their commitment to local regulations.
Lyu reiterated that despite the legal battles, KuCoin continues to operate optimally. The platform’s lawyers are actively investigating the details of the allegations to address any concerns raised by users. He emphasized the importance of compliance and standardization as the industry evolves and matures.
KuCoin’s withdrawal surge following the US authorities’ charges underscores the challenges faced by cryptocurrency exchanges in navigating regulatory uncertainties. Despite the setbacks, KuCoin remains committed to maintaining operational integrity and regulatory compliance as it continues to evolve in a rapidly changing industry landscape.
