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Is the Kucoin crypto exchange out of danger?

The cryptocurrency market has been in decline for months. Many players in the crypto space have filed for bankruptcy. This damning situation has given rise to dubious rumors about the financial health of many crypto exchanges. The latest target is Kucoin, which vehemently 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 alarmist prediction. According to confidential information, he said that KuCoin would be insolvent. He added that the platform may not have enough assets to meet user withdrawals, hinting at Kucoin’s insolvency.

In this regard, Johnny Lyu refuted the claim that his company suffered losses due to the collapse of Terra. 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 their entire funds whenever they want. Having a LUNA wallet does not necessarily mean that KuCoin as a company holds a lot of LUNA tokens, and I’m sure the difference is obvious.”

KuCoin CEO Johnny Lyu strongly believes that the exchange is by no means insolvent. To back up his statement, he highlighted his company’s progress despite the bear market which is forcing many other crypto businesses to revise their development plan.

Since the start of the bear market, the Kucoin platform has successfully raised $150 million in funds last May. Johnny Lyu also highlights the continuous recruitment of new employees as well as the addition of new features on the platform.

As for the $500 million financial hole, 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 false rumors

Businesses operating in the crypto space face tremendous pressure on a daily basis. Between market volatility and attacks from competitors, exchange companies must work harder to stand out. The current rumors against Kucoin are tarnishing 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 in order to avoid paying attention to peddlers of false information. However, the bear market and recent corporate bankruptcies are forcing companies to deny certain rumors which only fuel FUD and panic.

This is an opportunity for the CEO of Kucoin to issue a warning: “Beware of FUD attempts! I don’t know who is spreading these rumours, or what their intentions are, but KuCoin has no exposure to LUNA, 3AC, Babel, etc. No “tremendous pain” due to any “crypto meltdown”, no withdrawal stoppage planned, everything works fine on KuCoin.”

Many interests, at least financial ones, want the cryptocurrency market crash to continue. Just recently, a massive short selling attack against USDT (Tether’s USD stablecoin) was exposed.

So the question is whether HODLers and bullish investors will gain a foothold at current price levels, or whether the panic will manage to send us deeper into the bear market.

Bear markets don’t just reduce returns for investors. It also brings questions and questions. One thing is certain: transparency is the best way to ensure trust.

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