CryptoQuant CEO Explains Why KuCoin Won’t End Up Like FTX
CryptoQuant CEO Ki Young Ju compared crypto exchange KuCoin’s condition with FTX after the former was slapped with legal scrutiny. Amidst regulatory challenges faced by KuCoin, Ju provided insights into why KuCoin is unlikely to face a fate similar to FTX.
KuCoin Has Sufficient Reserves To Process Withdrawals
Ju emphasized the robustness of KuCoin’s on-chain reserves, particularly in Bitcoin (BTC) and Ethereum (ETH) withdrawals. Despite facing a surge in withdrawals, driven mainly by retail users, KuCoin’s reserves remain sufficient. Moreover, the crypto exchange witnessed only a minor impact on their overall reserve.
According to Ju, KuCoin doesn’t commingle customers’ funds and exhibits organic reserves, a notable difference from FTX’s practices. Furthermore, comparing KuCoin and FTX reserves, Ju highlighted other significant differences. While KuCoin’s reserves appeared stable and organic, FTX’s reserves were close to zero, according to a snapshot shared by Ju.
This indicated that FTX engaged in commingling of customers’ funds with their own. Ju pointed out numerous bulk deposits and withdrawals in FTX’s charts, suggesting a lack of transparency and legally compliant financial practices. On the other hand, KuCoin had over 100,000 ETH and more than 7,000 BTC at the time, which suggested smooth withdrawals for the time being.
In recent findings from 0xscope, the KuCoin exchange witnessed a substantial net outflow totaling approximately $1.2 billion in a day. Moreover, SpotOnChain’s analysis further underscores the impact of these developments. It reported that a considerable sum of around $500 million has been withdrawn from KuCoin’s Ethereum wallets in response to the US government’s criminal complaint.
Notable assets withdrawn include 274 million USDT, 15,500 ETH, 12 million FET, 50 million ONDO, and 95.38 million GHX, among others. However, despite this pronounced outflow of assets, KuCoin’s hot wallets still maintain a significant reserve. It retains over $3.6 billion worth of assets on the Ethereum network.
Also Read: KuCoin Hit by $200M Withdrawal Surge After DOJ Charges
DoJ’s Legal Scrutiny
The US Department of Justice (DoJ) accused KuCoin Exchange and its co-founders Chun Gan and Ke Tang of violating several laws to expand their trading platform into one of the largest in the emerging industry. Damian Williams, the US Attorney for the Southern District of New York, along with other top regulators, filed charges against Kucoin, Gan, and Tang.
They are accused of conspiring to run an unlicensed money-transmitting business and conspiring to breach the Bank Secrecy Act. In addition, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations, Darrin McCormack issued a statement.
“Today, we exposed one of the largest global cryptocurrency exchanges for what our investigation has found it to truly be: an alleged multibillion-dollar criminal conspiracy. KuCoin grew to service over 30 million customers, despite its alleged failure to follow laws necessary to ensuring the security and stability of our world’s digital banking infrastructure,” said McCormack.
Also Read: Breaking: US DOJ Charges Kucoin And 2 Co-Founders For Flouting AML Laws
The post CryptoQuant CEO Explains Why KuCoin Won’t End Up Like FTX appeared first on CoinGape.
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CryptoQuant CEO Explains Why KuCoin Won’t End Up Like FTX
CryptoQuant CEO Ki Young Ju compared crypto exchange KuCoin’s condition with FTX after the former was slapped with legal scrutiny. Amidst regulatory challenges faced by KuCoin, Ju provided insights into why KuCoin is unlikely to face a fate similar to FTX.
KuCoin Has Sufficient Reserves To Process Withdrawals
Ju emphasized the robustness of KuCoin’s on-chain reserves, particularly in Bitcoin (BTC) and Ethereum (ETH) withdrawals. Despite facing a surge in withdrawals, driven mainly by retail users, KuCoin’s reserves remain sufficient. Moreover, the crypto exchange witnessed only a minor impact on their overall reserve.
According to Ju, KuCoin doesn’t commingle customers’ funds and exhibits organic reserves, a notable difference from FTX’s practices. Furthermore, comparing KuCoin and FTX reserves, Ju highlighted other significant differences. While KuCoin’s reserves appeared stable and organic, FTX’s reserves were close to zero, according to a snapshot shared by Ju.
This indicated that FTX engaged in commingling of customers’ funds with their own. Ju pointed out numerous bulk deposits and withdrawals in FTX’s charts, suggesting a lack of transparency and legally compliant financial practices. On the other hand, KuCoin had over 100,000 ETH and more than 7,000 BTC at the time, which suggested smooth withdrawals for the time being.
In recent findings from 0xscope, the KuCoin exchange witnessed a substantial net outflow totaling approximately $1.2 billion in a day. Moreover, SpotOnChain’s analysis further underscores the impact of these developments. It reported that a considerable sum of around $500 million has been withdrawn from KuCoin’s Ethereum wallets in response to the US government’s criminal complaint.
Notable assets withdrawn include 274 million USDT, 15,500 ETH, 12 million FET, 50 million ONDO, and 95.38 million GHX, among others. However, despite this pronounced outflow of assets, KuCoin’s hot wallets still maintain a significant reserve. It retains over $3.6 billion worth of assets on the Ethereum network.
Also Read: KuCoin Hit by $200M Withdrawal Surge After DOJ Charges
DoJ’s Legal Scrutiny
The US Department of Justice (DoJ) accused KuCoin Exchange and its co-founders Chun Gan and Ke Tang of violating several laws to expand their trading platform into one of the largest in the emerging industry. Damian Williams, the US Attorney for the Southern District of New York, along with other top regulators, filed charges against Kucoin, Gan, and Tang.
They are accused of conspiring to run an unlicensed money-transmitting business and conspiring to breach the Bank Secrecy Act. In addition, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations, Darrin McCormack issued a statement.
“Today, we exposed one of the largest global cryptocurrency exchanges for what our investigation has found it to truly be: an alleged multibillion-dollar criminal conspiracy. KuCoin grew to service over 30 million customers, despite its alleged failure to follow laws necessary to ensuring the security and stability of our world’s digital banking infrastructure,” said McCormack.
Also Read: Breaking: US DOJ Charges Kucoin And 2 Co-Founders For Flouting AML Laws
The post CryptoQuant CEO Explains Why KuCoin Won’t End Up Like FTX appeared first on CoinGape.
Read More