KuCoin Appears Not to Commingle User Funds and has “Sufficient” Reserves: CryptoQuant CEO

cryptonews.com:

In the midst of criminal allegations and growing concerns over its reserves, the Seychelles-based cryptocurrency exchange KuCoin has received a vote of confidence from Ki Young Ju, the founder and CEO of crypto analytics service CryptoQuant. 

Despite recent legal troubles, Ju asserts that KuCoin appears to have maintained the segregation of user funds and possesses “sufficient” reserves to facilitate user withdrawals.

In a  recent post on X , Ju said that KuCoin witnessed a surge in Bitcoin (BTC) and Ethereum (ETH) withdrawals, primarily driven by retail users. 

However, these withdrawals reportedly had a minimal impact on the overall reserve of the exchange. 

From an on-chain perspective, Ju believes that KuCoin is in a stable position.

Scopescan data reveals that KuCoin boasts a total portfolio balance of $4.889 billion across multiple chains, further supporting Ju’s assessment of the exchange’s reserves.

The U.S. Department of Justice recently  accused KuCoin founders  Chun Gan and Ke Tang of willfully neglecting to maintain an Anti-Money Laundering program and asserting that the exchange was involved in money laundering and terrorist financing.

Ju drew a comparison between KuCoin and the now-defunct crypto exchange FTX, highlighting that KuCoin appears to have avoided commingling customer funds with its own reserves. 

This differentiation is crucial, as crypto investors tend to withdraw their funds when concerns arise regarding an exchange’s legal standing or reserve status.

Here are FTX reserves for comparison.

FTX commingled customers' funds with their funds; you can see a lot of bulk deposits/withdrawals in the charts. It doesn't look organic. pic.twitter.com/0LxRAriZnL

— Ki Young Ju (@ki_young_ju) March