KuCoin falls 21% in a week after rumours and regulatory setbacks

KuCoin CEO Johnny Lyu rebuts online speculation

KCS                                 
KuCoin Token’s market capitalisation falls by almost $1.2bn in less than two months – Photo: Shutterstock
                                

The KuCoin Token (KCS) was trading at $8.29 at 15:00 BST (UTC +1) on Monday, 21% lower than where it stood just a week earlier. 

Having stood at $2bn in mid-April, the market capitalisation of the KuCoin exchange’s native token amounted to $817m earlier today. In part, the token’s decline can be attributed to the sell-off in the wider cryptocurrency market. Around $1.2trn in value has been wiped off the capitalisation of the total crypto market since the start of the year. 

However, the pronounced drop experienced in the past week was also caused by a rush of rumours that KuCoin the exchange is somehow exposed to Luna and Three Arrows Capital (3AC). 

The collapse of the Terra stablecoin and the associated LUNA cryptocurrency has reverberated throughout the cryptocurrency industry since May. With $45bn in market capitalisation essentially wiped, a number of prominent institutions have struggled to hold their heads above water. The crypto hedge fund 3AC, which had around $3bn in assets under management in April, filed for bankruptcy on Friday. 

Meanwhile, Celsius, a leading cryptocurrency lender, controversially halted withdrawals last month citing “extreme market conditions”. Facing possible insolvency, the company is thought to have cut around 23% of its workforce in a restructuring effort. 

CEO rebuffs rumours

With online speculation rife about KuCoin, the exchange’s CEO Johnny Lyu forecfully addressed the rumours and tweeted: “Not sure who's spreading these sheer rumors, and what their intentions are, but KuCoin does not have any exposure to LUNA, 3AC, Babel, etc. No ‘immense suffer’ from any ‘coin collapse’, no plan to halt withdrawal[s], everything on KuCoin is operating well.”

Lyu further stressed the firm’s recent fundraising success, the fact that it is continuing to hire despite the bear market and pledged to publish a review of the company’s first half for the sake of transparency. 

KuCoin suffers setback in Ontario, Canada

One verifiable and genuine setback that may have also affected the token’s value was the decision by a Canadian regulator last week to ban the exchange in the state of Ontario.

The Ontario Securities Commission said in a statement that the company – along with cryptocurrency derivatives exchange Bybit – operated “unregistered crypto asset trading platforms and allowed Ontario investors to trade securities without a prospectus or any exemption from the prospectus requirements”.

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