Users have withdrawn a substantial amount of crypto assets from KuCoin since U.S. federal prosecutors announced their charges against the crypto exchange and its founders on Tuesday.
The value of ERC-20 stablecoins such as USDT and USDC in KuCoin’s exchange reserve has dropped 22% in the last few hours.
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Posted March 26, 2024 at 5:33 pm EST.
KuCoin’s exchange reserves have decreased by $273 million in the past several hours since U.S. federal prosecutors announced charges against the cryptocurrency exchange and its two founders, Chun Gan and Ke Tang, for violating anti-money laundering laws.
According to data analytics firm CryptoQuant, the value of ERC-20 stablecoins such as USDT and USDC in KuCoin’s exchange reserve has dropped from $1.217 billion at 10 a.m. to roughly $944 million at presstime, a 22% decrease.
The Justice Department has accused KuCoin of being a “multibillion-dollar criminal conspiracy,” with federal prosecutors charging its founders with “willfully failing to maintain an adequate anti-money laundering (“AML”) program designed to prevent KuCoin from being used for money laundering and terrorist financing.” The withdrawal of assets from KuCoin is a sign of fear among crypto users about holding their assets in an exchange that is getting indicted by the Department of Justice.
“The charges from U.S. federal prosecutors against KuCoin and its founders, under the Bank Secrecy Act, signal significant concerns,” said analytics firm Nansen in an email. KuCoin has seen a “notable increase in [outflow] withdrawals” on both Ethereum and EVM-compatible chains, highlighting “potential broader market impact.”
KuCoin did not immediately return a request for comment for this story.
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