Ethereum Takes the Lead in Withdrawals, Reaching $500 Million on KuCoin

 

Large-Scale Withdrawals Hit KuCoin, Led by Ethereum: A Comprehensive Overview

Data from multiple on-chain analytics platforms, including DefiLlama, Nansen, and SpotOnChain, reveals a sharp rise in withdrawals across various trader profiles, such as whales, funds, smart money, and market makers.

Regulatory Pressures and Withdrawal Surge

On March 26, U.S. authorities accused KuCoin and its founders of operating without legal authorization and violating banking secrecy and anti-money laundering (AML) laws.

The day after the allegations, KuCoin experienced a significant surge in withdrawal requests, particularly for Ethereum-based tokens. Blockchain sleuth LookonChain identified two whale accounts moving a total of $86 million in USDT to platforms like OKX and Bybit.

This wave of withdrawals led to delays in processing, sparking concerns reminiscent of the FTX collapse. However, Ki Young Ju, CEO of CryptoQuant, reassured users, emphasizing that KuCoin has adequate reserves and does not mix customer funds.

“On-chain data shows KuCoin is stable. BTC and ETH withdrawals have increased significantly, driven primarily by retail users, but the impact on total reserves has been minimal. KuCoin appears to maintain sufficient reserves to handle user withdrawals,” he stated.

DefiLlama’s CEX transparency dashboard confirms that KuCoin’s wallets still hold $3.68 billion in assets at the time of writing.

Commitment to Regulatory Compliance

KuCoin CEO Johnny Lyu highlighted that legal challenges are not unique to the platform but represent common hurdles faced by emerging industries.

He explained, “Early-stage development often encounters regulatory gaps, but as the industry matures, we aim to embrace compliance and standardization.”

Lyu pointed out that KuCoin recently became the first global exchange to register in India, reflecting its “commitment to respecting local regulations and taking a proactive compliance approach.”

Withdrawal Breakdown

SpotOnChain reported total withdrawals of approximately $500 million, including:

• $274 million in USDT

• 15,500 ETH (~$55 million)

• 50 million ONDO tokens (~$46 million)

• 12 million FET (~$34 million)

• Plus various other assets.

KuCoin’s response to these challenges will likely influence its reputation and standing in the highly competitive crypto exchange market.