On Tuesday, the U.S. Division of Justice introduced legal fees towards international cryptocurrency trade KuCoin and its two founders, Chun Gan (aka “Michael”) and Ke Tang (aka “Eric”). The costs, which contain conspiring to function an unlicensed cash switch enterprise and violating the Financial institution Secrecy Act, have raised issues amongst customers and traders about the way forward for the Seychelles-based trade, echoing issues about FTX’s collapse.
Is KuCoin the subsequent FTX?
In accordance with an official press launch from the Southern District of New York, the indictment accuses KuCoin and its founders of willfully failing to implement applicable anti-money laundering (AML) packages. This oversight allegedly facilitated using the platform for cash laundering and terrorist financing.
Moreover, the trade was accused of not sustaining the mandatory procedures to confirm buyer identities and failing to report any suspicious exercise.
Regardless of these severe accusations, CryptoQuant CEO Ki Younger Ju if The alternative view focuses on the operational and monetary stability of the trade. Ju’s assertion on
Ju mentioned: “On-chain, KuCoin is just not dangerous. The surge in BTC and ETH withdrawals, primarily pushed by retail customers, has much less influence on general reserves. They don’t look like commingling clients’ funds and have sufficient reserves to deal with customers Withdraw cash.”
The reassurance comes at a crucial time when recollections of the collapse of FTX, triggered by liquidity points and allegations of misuse of buyer funds, are nonetheless lingering within the cryptocurrency neighborhood. Ju made a transparent distinction between KuCoin and FTX’s reserve administration practices, emphasizing the natural nature of KuCoin’s BTC and ETH reserves in distinction to FTX’s fund dealing with points.
“Not like FTX, Kucoin’s BTC and ETH reserves look like natural. They don’t combine consumer funds.” Ju mentioned, sharing CryptoQuant’s Bitcoin and Ethereum international trade reserves chart.
Ju in contrast these charts to FTX’s, noting that “that is FTX’s reserves for comparability. FTX mixes purchasers’ funds with theirs; you may see massive batch deposits/withdrawals within the chart type. It doesn’t look natural.”
As of now, KuCoin holds 5.949 BTC and 99.358 ETH, in keeping with CryptoQuant knowledge. In accordance with Scopescan knowledge, KuCoin’s complete portfolio steadiness throughout a number of chains is value $4.764 billion.
At press time, the KuCoin token (KCS) was buying and selling at $11.42, down -20% for the reason that information broke.
Featured picture from Shutterstock, chart from TradingView.com
