KuCoin CEO debunks bankruptcy rumors, says exchange not facing financial crisis

Key Takeaways:

  • Twitter user claims KuCoin is insolvent, owing over $500 million.
  • KuCoin CEO says Twitter guy ‘Otteroooo’ is making noises.
Celsius Bankruptcy Liquidation
Celsius offers creditors reduced payout now or long-term crypto pay

LAGOS (CoinChapter.com) — As the entire cryptocurrency ecosystem continues to deal with a series of insolvency and liquidation incidents, a new report has emerged alleging that Seychelles-based crypto exchange KuCoin is also insolvent.

In a now-deleted tweet, a Twitter user named @otteroooo claims that KuCoin does not have the coin to pay back investors. Otteroooo, in a series of tweets, alleged that the crypto exchange was holed up by over $500 million.

While issuing warnings to KuCoin customers, otteroooo disclosed that its source was a former crypto exchange employee. Furthermore, it indicated that the company was in financial trouble and set to join the likes of Celsius and Voyager Digital, which recently filed for bankruptcy.

Additionally, in another tweet, otteroooo’s Twitter account, which currently boasts more than 30,000 followers, credited the collapse of LUNA for KuCoin’s current situation. It alleged that the exchange was staking LUNA until its collapse in May and lost more than $500 million.

Otteroooo further suggested that KuCoin has massive wLUNA, wLUNC exposure. And as a result, I incurred serious debt due to the collapse of Terraform Labs.

“Looking at blockchain records today. If @kucoincom had the same amount of wLUNA today and pre crash. It would have lost a market value of …. $12,000,000,000++ (more than $12bn!!). Note: LUNA market cap pre-crash was about $40bn.”

Otteroooo claimed.

Noise only

KuCoin CEO Johny Lyu has dismissed Otteroooo’s claims noise, reiterating that KuCoin is not insolvent. In a blog post, Lyu vehemently denied that the crypto exchange was facing any financial crisis.

Lyu explained that the exchange has been battling rumors to fuel fear among its customers. He indicated that Otteroooo was ignoring facts and intentionally spreading his FUDs to hurt the exchange.

“While other users publicly admit their assumptions were wrong, otteroooo doesn’t mind making mistakes over and over, which makes us believe he is either bad in fact-checking and analyzing, or he has some interest in spreading the FUD.”

Lyu said.

Moreover, KuCoin’s CEO also assured investors that the exchange had no exposure to wLUNA. On why there are many wLUNA in KuCoin’s wallet. Lyu said,

“I explained that before the LUNA incident, KuCoin supported LUNA (now LUNC) transactions in two chains — mainnet and ERC-20. And at the time, the LUNA token on ERC-20 is called Wrapped LUNA (wLUNA).”

KCS Price Is Down 2%

As a result of the ensuing fiasco, KuCoin’s native token (KCS) was trading in the negative on the day. According to data from Coingecko, KCS was down by 2% and trading at $10.

The token was also down by almost 5% in the last 30 days. Furthermore, KCS’s market cap has plunged in the last 24 hours and currently sits at $990 million. Also, the exchange token is down 65% from its December all-time high of $28.83, according to CoinGecko.

Additionally, KCS presently has a 24-hour trading volume of $3.5 million with a circulating supply of 98 million KCS coins and a total supply of 145 million.

KuCoin, KuCoin CEO debunks bankruptcy rumors, says exchange not facing financial crisis

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