Despite the criminal charges, KuCoin is considered ‘good’ by the analyst.
Kee Young Joo, founder and CEO of crypto analytics service KuCoin, a Seychelles-based crypto exchange, declared it “good” despite concerns about criminal charges and the stock among its users.
“BTC and ETH withdrawals have increased,” CryptoQuant CEO Ki Yang Ju said in a post on X.
“They don't mix customers' funds and they seem to have enough reserves to process user withdrawals,” Ju said, adding that from the chain's point of view, the exchange is “good.”
The total portfolio balance of KuCoin across multiple chains stands at $4.889 billion, according to Scopescan data.
On March 26, the US Department of Justice alleged that KuCoin founders Chun Gan and Ke Tang had deliberately failed to maintain an anti-money laundering program on the exchange and that the platform was being used for “money laundering and terrorist financing”.
Ju compared KuCoin's reserves with the now-defunct crypto exchange FTX, where it appears that KuCoin does not mix customer funds with its own reserves.
Crypto investors typically pull their money out of crypto exchanges when they become aware of legal issues or the exchange's reserve status.
As users rushed to withdraw billions of dollars from FTX, Binance's former CEO Changpeng “CZ” Zhao tweeted that Binance would remove all FTX native FTT tokens.
RELATED: Despite $40B Flow To Exchanges, Bitcoin Mining Stocks Steady In February
The risk of KuCoin or other large exchange stocks is not limited to its users, as these concerns can often snowball into a wider market migration. When news of FTX's failure broke, the price of Bitcoin fell by more than 20% in a week.
Yet, despite the legal action against KuCoin's founders, the market doesn't seem overly concerned by the news, with the Crypto Fear and Greed Index still showing high levels of greed, currently at 83 points.
Magazine: Can you trust crypto exchanges after the FTX collapse?