The cryptocurrency market has been in decline for months. Many players in the crypto space have filed for bankruptcy. This damning situation has given rise to dubious rumors about the financial health of many crypto exchanges. The latest target is Kucoin, who vehemently denies the allegations against it.
Kucoin is not at risk, CEO claims
In a tweet on Saturday, otterooo, the account that tweets about cryptocurrency developments, made the alarming prediction. According to confidential information, he said that KuCoin would be insolvent. He added that the platform may not have enough assets to meet user withdrawals, suggesting Kucoin’s insolvency.
In this regard, Johnny Lyu refuted the claim that his company suffered losses as a result of Terra’s collapse. The CEO of KuCoin clarified that most of the funds in KuCoin wallets are not from exchanges, but from users.
“It is our responsibility to keep them safe and ensure that users can always withdraw their full funds whenever they want. Having a LUNA wallet doesn’t necessarily mean that KuCoin as a company has a lot of LUNA tokens, and I’m sure the difference is obvious.”
KuCoin CEO Johnny Lyu strongly believes that the exchange is by no means insolvent. To back up his statement, he emphasized his company’s progress despite the bear market that is forcing many other crypto firms to review their development plan.
Since the onset of the bear market, the Kucoin platform successfully raised $150 million in funds last May. Johnny Lyu also emphasizes the ongoing recruitment of new employees and the addition of new features to the platform.
As for the $500 million financial hole, Otteroooo’s Twitter account provided no evidence that the alleged employee actually worked at KuCoin.
The CEO of KuCoin invites his customers to form their own opinion on the situation. In fact, it is difficult for many to choose which of these two personalities to believe. Johnny Lyu said he told Otteroooo about it. However, he refused to be convinced.
Figuring out the real news and false rumors
Companies operating in the crypto space are under enormous pressure on a daily basis. Between market volatility and competitor attacks, stock companies have to work harder to stand out. The current rumors against Kucoin are tarnishing the reputation of the exchange and causing some panic in the market.
Even in a healthy, bullish market, companies choose to ignore these panic attacks without evidence. This is to avoid paying attention to peddlers of false information. However, the bear market and recent corporate bankruptcies are forcing companies to deny certain rumors that only fuel FUD and panic.
This is an opportunity for Kucoin’s CEO to issue a warning: “Beware of FUD attempts! I don’t know who is spreading these rumors, or what their intentions are, but KuCoin has no exposure to LUNA, 3AC, Babel , etc. No “huge suffering” due to a “crypto meltdown”, no withdrawals planned, everything works fine on KuCoin.”
Many interests, at least financial ones, want the cryptocurrency market crash to continue. Recently, a massive short selling attack on USDT (Tether’s USD stablecoin) was exposed.
So the question is whether the HODLers and bull investors will gain a foothold at the current price level, or whether the panic will take us deeper into the bear market.
Bear markets don’t just reduce returns for investors. It also brings questions and questions. One thing is certain: transparency is the best way to ensure trust.