KuCoin cryptocurrency exchange, faces tumultuous times amid legal battles with US authorities, leading to a significant decrease in user assets.
The latest proof-of-reserve certificate reveals notable declines in Bitcoin, Ethereum, and Tether holdings. Despite these challenges, KuCoin reassures users of fully backed assets within its system and unveils plans for a substantial compensation airdrop to alleviate withdrawal delays.
Legal Challenges on KuCoin Results in Tokens Decline
Recent legal challenges have taken a toll on KuCoin, leading to a noticeable decline in user assets. Bitcoin holdings plummeted by 25.4% to 12,114 BTC, while Ethereum balances dropped by around 22% to 112,000 ETH.
Similarly, Tether’s USDT holdings saw a 22% decrease to 963 million tokens. Data from DeFiLlama confirms the downtrend, with over $843 million worth of digital assets withdrawn from the platform in the past week alone, reducing KuCoin’s balance from over $4.3 billion to $3.25 billion.
Despite this decline, the cryptocurrency exchange’s proof-of-reserves certificate assures fully backed assets, with token collateralization ranging from 109% to 115%. The exchange faced lawsuits from US authorities, including the Department of Justice and the CFTC, alleging violations of anti-money laundering regulations.
Consequently, market share and trading volume significantly declined, with daily trading volume dropping to around $520 million and market share decreasing from about 6.5% to less than 3%. Users transferred assets to rival centralized exchanges like Coinbase, Binance, and OKX amid the legal turmoil.
CEO Johnny Lyu emphasized the exchange’s compliance efforts, stressing that legal battles are not unique. In addition, KuCoin announced plans for a $10 million airdrop of its KCS native token and Bitcoin to compensate users who experienced withdrawal delays between March 26 and 28.
