The cryptocurrency market has been in decline for several months. Many players in the crypto space have filed for bankruptcy. This damning situation has given rise to questionable rumors about the financial health of many crypto exchanges. The latest target is Kucoin, which strongly denies the allegations against it.
Kucoin is not in danger claims the CEO
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 accommodate user withdrawals, suggesting Kucoin’s insolvency.
In this regard, Johnny Lyu rejected the claim that his company suffered losses due to Terra’s collapse. The CEO of KuCoin clarified that most of the funds in KuCoin wallets do not belong to exchanges, but to users.
“It is our responsibility to keep them safe and ensure that users can always withdraw all their money whenever they want. Having a LUNA wallet does not necessarily mean that KuCoin as a company holds a lot of LUNA tokens and I am sure that the difference is obvious.”
KuCoin CEO Johnny Lyu is convinced that the exchange is by no means insolvent. To support his statement, he highlighted his company’s progress despite the bear market, which is forcing many other crypto companies to revise their development plan.
Since the start of the bear market, the Kucoin platform has successfully raised $150 million in funding last May. Johnny Lyu also highlights the ongoing recruitment of new employees as well as the addition of new features on the platform.
As for the $500 million financial gap, 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, for many it is difficult to choose which of these two personalities to believe. Johnny Lyu said he told Otteroooo about it. However, he refused to be convinced.
Sorting out the real news and fake rumours
Companies operating in the crypto space face enormous pressure on a daily basis. Between market volatility and onslaught from competitors, listed companies have to work harder to stand out. The current rumors against Kucoin tarnish the reputation of the exchange, causing some panic in the market.
Even in a healthy, bullish market, companies choose to ignore these attempts to create panic without evidence. This is to avoid being aware of peddlers of false information. However, the bear market and recent corporate bankruptcies are forcing companies to dismiss certain rumors that only fuel R&D 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 “enormous suffering” due to any “crypto meltdown”, no withdrawal stop planned, everything is working fine on KuCoin.
Many interests, at least economic ones, want the cryptocurrency market to continue. Recently, a massive short selling attack against USDT (Tethers USD stablecoin) was revealed.
So the question is whether HODLers and bullish investors get a foothold at the current price levels or whether the panic manages to send us deeper into the bear market.
Bear markets don’t just reduce returns for investors. It also brings questions and issues. One thing is certain: transparency is the best way to ensure trust.