KuCoin Plans $10M BTC Airdrop, KCS As Justice Department, CFTC Circle

Cryptocurrency exchange KuCoin will hold an airdrop of Bitcoin (BTC) and its native KuCoin (KCS) token will be worth $10 million, according to a letter from CEO Johnny Liu posted on the exchange's blog on March 27. The news comes a day after the United States. The Department of Justice announced the indictment of the exchange and two of its founders.

Although Liu mentioned it in the first sentence of the letter, he did not mention the federal charges.

“I would like to express my gratitude to all KuCoin users for your support, trust and partnership over the past few days.”

Comparing the airdrop to Confido's carpet-pulling payout to investors who lost money, Liu continued:

“Recently, on March 26 and 27, some users experienced longer than expected delays in the checkout process. […] To express our deep gratitude for your support and patience, KuCoin will launch a special airdrop event with a total of $10 million in KCS and BTC.

Airport regulations will be released in three days, Liu wrote. Delays in recent withdrawals may be significant due to wary customers leaving the exchange. The Airdrop rewards users who remain loyal to the change during the crisis.

Related: KuCoin agrees to block New Yorkers and pay $22 million in fines

The timing of the airdrop is noteworthy as KuCoin was hit by a spate of legal actions a day earlier. The Justice Department has filed charges against the two founders for violating the Bank Secrecy Act for not having an anti-money laundering program and operating an unauthorized money transmitter business.

Similarly, the Commodity Markets Trading Commission (CFTC) filed a civil suit alleging violations of the Commodity Markets Act and CFTC regulations.

KuCoin rushed to assure users that their assets were safe after the lawsuit was filed and KCS dropped 12% within 24 hours.

Air drops come with risks, not the least of which is the possibility of regulatory action. The SEC wrote in the document, “Framework for the Analysis of “Investment Contracts” in Digital Assets:

The lack of financial consideration for digital assets such as those distributed through so-called “airdrops” does not mean that financial investment has been made. [of the Howey test] Not satisfied; Therefore, an airdrop can be a collateral sale or distribution.

The Diffie Education Fund teamed up with a small Texas clothing company to sue the SEC for an injunction to prevent the agency from suing for airdrops.

Magazine: A cool green mayor gives every resident a big gift in Bitcoin