KuCoin Bleeds $100M In 3 Hours Post-DOJ Indictment

KuCoin’s stablecoin reserves drop by more than $100 million in 3 hours following US Department of Justice indictment [DOJ] It was announced that prosecution had begun.according to cryptoquant, the mass exodus of stablecoins is primarily driven by US-based customers who feared their accounts would be blocked or frozen by the US or its brokers. It is worth noting that the reserve consists only of Ethereum-compatible ERC-20 stablecoins.

The indictment focuses on KuCoin’s two founders, Chun Guan, also known as “Michael,” and Ke Tan, known as “Eric.” The Justice Department charged executives with multiple charges, including “conspiracy to violate the Bank Secrecy Act” and failing to maintain adequate anti-money laundering measures. [“AML”] Create programs and run them without a license.

A report from SpotOnChain sheds more light on the withdrawal. After filing a criminal complaint against KuCoin, approximately $500 million in assets were recovered from KuCoin on Ethereum in the past few hours, including 274 million USDT, 15,500 ETH, 50 million ONDO, 12 million FET, 95.38 million GHX, etc. It’s being pulled out. , KuCoin’s hot wallet still stores $3.6 billion worth of assets on Ethereum.

0xscope data showed that KuCoin’s overall assets recorded a net outflow of approximately USD 1.195 billion in the past 24 hours, and still holds assets of USD 4.02 billion. [including its exchange tokens].

KuCoin responds to Justice Department request

Following this news, there were reports that the Seychelles-based cryptocurrency exchange is considering ceasing operations in 2023 and selling the exchange. KuCoin was the subject of a criminal investigation by the United States in 2023, and is also under multiple investigations in China.

The platform has been grappling with legal and operational issues since the Luna explosion, which crippled many major industry players and exposed a liquidity crisis. The company was subsequently banned from trading by Canadian regulator the Ontario Securities Commission. [OSC]and faced a lawsuit from the New York State Attorney General’s office alleging that the trading platform violated the Martin Act in three different ways.

As of the latest development, KuCoin CEO The remaining He opened up and emphasized that the challenges faced are not unique, but rather typical growth and regulatory issues faced by emerging industries.

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