Ki Young Ju, the founder and CEO of crypto analytics service CryptoQuant, has declared that the Seychelles-based crypto exchange KuCoin is in good standing, despite facing criminal allegations and concerns over its reserves from its users. Ju stated in a post on X that BTC and ETH withdrawals have increased, mainly driven by retail users, but it has had a minimal impact on the overall reserve. He claims that KuCoin does not mix customers’ funds and has enough reserves to process user withdrawals, suggesting that the exchange is “fine” from an on-chain perspective.
According to Scopescan data, KuCoin’s total portfolio balance across multiple chains is $4.889 billion. In contrast to the now-defunct crypto exchange FTX, Ju highlights that KuCoin has not mixed customer funds with its own reserves. This distinction is significant as crypto investors typically withdraw their funds from exchanges when they become aware of legal concerns or issues with the exchange’s reserve status. When the former CEO of Binance, Changpeng “CZ” Zhao, tweeted that Binance would dispose of all their holdings of FTX’s native FTT token, users rushed to withdraw billions of dollars from FTX.
Concerns about KuCoin’s reserves, or those of other large exchanges, are not limited to its users alone. These worries can lead to a wider market exodus. For example, when news of FTX’s collapse surfaced, the price of Bitcoin dropped over 20% within a week. However, despite legal action against KuCoin’s founders, the market does not seem overly concerned, as the Crypto Fear & Greed Index still indicates an extreme level of greed, currently scoring 83.
In light of the collapse of FTX, there are questions about whether crypto exchanges can be trusted.