KuCoin Users Withdraw Over $1.2 Billion Amidst US Charges

KuCoin, a prominent cryptocurrency exchange, has experienced a significant withdrawal of over $1.2 billion from its platform within the last 24 hours, triggered by a withdrawal frenzy among users following fresh charges leveled against the platform by US authorities.

According to reports from BeinCrypto, the platform witnessed withdrawals totaling about $500 million from the Ethereum blockchain alone. Data from SpotOnChain further revealed substantial withdrawals, including 274 million USDT and 15,500 ETH, from KuCoin’s Ethereum holdings in recent hours. Despite these withdrawals, the exchange’s Ethereum hot wallets still retain over $3.6 billion in assets.

Oxscope, a Web 3 AI data platform, indicated that KuCoin experienced an outflow of approximately $1.195 billion over the past day. However, despite the withdrawals, the exchange’s asset base remains robust, standing at over $4.02 billion.

Special Agent Darren McCormack, leading the criminal investigation for HSI, commented on the US charges against KuCoin, highlighting the platform’s alleged growth at the expense of legal compliance. McCormack stated, “KuCoin’s growth to over 30 million customers came despite its alleged legal non-compliance.”

In response to the charges, KuCoin CEO Johnny Lyu emphasized the regulatory challenges faced by crypto startups and highlighted KuCoin’s recent enrollment with India’s FIU as part of the exchange’s efforts to meet regulatory requirements and ensure legal compliance. Lyu reiterated KuCoin’s commitment to prioritizing user asset security and assured the community of normal operations, stating, “As the People’s Exchange, we prioritize user asset security above all else. All operations, including deposits and withdrawals, are normal. I want to thank everyone in the community and our partners for your support. I’ll keep my X open and keep you all posted regularly.”

Additionally, Lyu assured KuCoin users of operational normalcy and reiterated the exchange’s dedication to user asset security amid the ongoing legal challenges.

The current situation arises as KuCoin faces a US indictment pointing to alleged shortcomings in anti-money laundering efforts and customer identity verification. These deficiencies allegedly made KuCoin an accomplice contributing to over $9 billion of suspect transactions. Despite these challenges, KuCoin remains one of the largest cryptocurrency exchanges, boasting a user base of over 30 million customers.

The developments surrounding KuCoin underscore the regulatory complexities and legal challenges faced by cryptocurrency exchanges operating in a rapidly evolving landscape. As authorities increase scrutiny on compliance and security measures, exchanges like KuCoin must navigate regulatory frameworks while ensuring the safety and trust of their users. In the face of adversity, KuCoin’s assurance of normal operations and commitment to user asset security will be closely monitored by the cryptocurrency community as the situation unfolds.