Controversial crypto exchange KuCoin faced a wave of withdrawal requests over the past day after US authorities filed criminal charges against the platform.
Data from various analysis companies in the chain, including DefiLlama, Nansenand SpotOnChain showed an increase in withdrawals across multiple categories of traders, including whales, funds, smart money and market makers.
On March 26, US authorities alleged that the exchange and its founders operated without proper legal authorization and violated bank secrecy and anti-money laundering (AML) laws.
KuCoin withdrawals
The exchange experienced significant withdrawals of Ethereum-based tokens during the reporting period.
SpotOnChain reported withdrawals totaling approximately $500 million, including $274 million USDT, 15,500 ETH (approximately $55 million), 50 million ONDO tokens (approximately $46 million), and 12 million FET ($34 million), among others.
Similarly, the 0xscope dashboard places KuCoin’s total net outflows at $520 million during the reporting period.
In addition, blockchain detective LookonChain identified two whale accounts that collectively moved $86 million USDT to platforms like OKX and Bybit.
In the midst of the recordings, there are countless users reported delays, raising concerns reminiscent of the FTX collapse.
However, CryptoQuant CEO Ki Young Ju has addressed these concerns: proverb the platform has sufficient reserves to process withdrawals, while emphasizing that KuCoin does not mix customers’ funds.
He said:
“As far as the chain is concerned, KuCoin is fine. BTC and ETH withdrawals soared, mainly thanks to retail users, with a small impact on the total reserve. They do not appear to commingle customer funds and have sufficient reserves to process user withdrawals.”
DefiLlama CEX transparency dashboard shows that the exchange’s portfolios still contain assets worth $3.68 billion at the time of writing.
Promote compliance
KuCoin CEO Johnny Lyu said The exchange’s legal battles are not unique, but “typical growth and regulatory issues facing emerging industries.”
According to him:
“In early stage development there are often regulatory gaps, but as the industry matures we are moving towards and embracing compliance and standardization.”
He pointed out that the platform recently became the first global exchange to register in India, adding that this reflects the platform’s “respect for local regulations and a proactive approach to compliance.”
Lyu reiterated that the exchange continues to function optimally and that the firm’s lawyers were investigating the details of the allegations.