KuCoin Sees Net Outflow of Nearly $800 Million Following DOJ Indictment

KuCoin saw a net outflow of more than $780 million across multiple chains in the past 24 hours after the U.S. Department of Justice filed charges against it on Tuesday, according to on-chain data.

Data from crypto analytics company Nansen watch that KuCoin saw a total outflow of $882 million in the last 24 hours Wednesday midday in Asia across multiple networks and an inflow of $99 million, with a net outflow of $783 million. The dataset covers flows on Ethereum, BNB Chain, Avalanche, Fantom and Polygon chains.

The notable exodus from KuCoin comes after the DOJ unsealed the indictment against KuCoin and two of its founders on Tuesday, alleging they violated anti-money laundering laws. The Commodity Futures Trading Commission also reiterated in KuCoin’s complaint that ether and several other cryptocurrencies are commodities.

“Given past incidents, it is expected that any significant regulatory crackdown will lead to increased capital outflows, but as long as the exchange holds deposits and customer funds at 1:1, it should remain solvent even in such tensions,” Martin Lee, Nansen’s Content and Head of Communications, told The Block.

The exchange has crypto holdings of $5.1 billionaccording to Nansen.

Low impact on foreign exchange reserves

KuCoin’s bitcoin reserve stood at approximately 6,277 bitcoins, while its ether reserve stood at 99,359 ether as of midday Wednesday in Asia, according to CryptoQuant. data.

“Regarding the channel, [KuCoin] everything is fine,” wrote Ki Young Ju, founder and CEO of CryptoQuant, in an job. “Withdrawals of BTC and ETH increased, mainly driven by retail users, with a slight impact on the overall reserve. They do not appear to commingle customer funds and have sufficient reserves to process user withdrawals.

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