Crypto exchange platform, KuCoin is under fire after US federal prosecutors accused the exchange and two of its founders of violating anti-money laundering laws, prompting a massive wave of withdrawals from concerned users.
U.S. charges shake KuCoin investor confidence
This Tuesday, March 26, 2024 U.S. federal prosecutors filed serious charges against KuCoin and two of its founders, alleging their involvement in violations of anti-money laundering laws laws.
A Homeland Security Investigations Special Agent went so far as to call the exchange “an alleged multi-billion dollar criminal conspiracy”, a statement that sent shockwaves through the crypto industry.
These accusations immediately shook the confidence of the platform’s users, triggering a veritable panic among users of KuCoin. Fearing for the safety of their assets, many customers rushed to withdraw their funds from the exchange.
Over a billion dollars leaves Kucoin
Data provided by blockchain analytics company Nansen This Wednesday, March 27, highlights the scale of the crisis.
In just 24 hours, KuCoin recorded massive outflows of approximately $1.083 billion via channels compatible with Ethereum Virtual Machine (EVM), while cash inflows were only $144 million. On the Ethereum network alone, net outflows reached $840 million.
This haemorrhage of assets led to a spectacular fall of over 20% in stock market holdings from $6 billion to $4.8 billion. While fluctuations in crypto prices may have played a marginal role in this decline, it is clear that the wave of mass withdrawals is the main cause.
Despite blockchain data showing that KuCoin honors withdrawal requests, many frustrated users complain of abnormally long delays in processing their transactions. These delays are most likely due to the sudden and colossal influx of requests, putting a strain on the information systems and resources of the platform, which is struggling to cope with this unprecedented crisis situation.
Although KuCoin seems to be holding its own for the time being, and proceeding rather normally with withdrawal requests, time will tell whether the crypto exchange platform will manage to weather this regulatory storm and regain the shaken confidence of its users.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
