The Seychelles-based crypto exchange KuCoin has been declared “fine” by Ki Young Ju, the founder and CEO of crypto analytics service CryptoQuant, despite criminal allegations and mounting concerns over its reserves among its users.
“BTC and ETH withdrawals surged, driven mainly by retail users, with a small impact on the overall reserve,” CryptoQuant CEO Ki Young Ju stated in a post on X.
“They appear to not commingle customers' funds and have sufficient reserves to process user withdrawals,” Ju stated, claiming that from an on-chain perspective, the exchange appears to be “fine.”
KuCoin’s total portfolio balance across multiple chains stands at $4.889 billion, according to Scopescan data.
On March 26, the U.S. Department of Justice alleged that KuCoin founders Chun Gan and Ke Tang had willfully failed to maintain an Anti-Money Laundering program at the exchange and claimed the platform wasbeing used for “money laundering and terrorist financing.”
Ju contrasted KuCoin’s reserves with those of the now-defunct crypto exchange FTX, noting that KuCoin appears to have not mixed customer funds with its own reserves.
Crypto investors typically withdraw their funds from crypto exchanges when they become aware of legal concerns or issues with an exchange’s reserve status.
Users rushed to withdraw billions of dollars of funds from FTX, when the former CEO of Binance, Changpeng “CZ” Zhao, tweeted that Binance would be disposing of all their entire holdings of FTX’s native FTT token.
Related: Bitcoin miner reserves held steady in February, despite $40B flows to exchanges
Concerns with KuCoin's or another large exchange's reserves are not limited to its users alone, as these worries can often snowball into wider market exodus. When news of FTX's collapse emerged, the price of Bitcoin fell more than 20% within the week.
Yet, despite legal action against KuCoin’s founders, the market doesn't appear to be overly concerned by the news, with the Crypto Fear and Greed Index still indicatingan extreme level of greed, currently at a score of 83.
Magazine: Can you trust crypto exchanges after the collapse of FTX?
