The year 2022 started on a bad note for the cryptocurrency market. Cryptos tanked by an average of more than 80%. Crypto projects and companies followed, like the Terra Foundation, 3 Arrows Capital, and Voyager. It seems that the effect of those collapses is still taking a heavy toll on other companies. It seems that KuCoin is one of those companies, as there are many rumors that the company has a high chance of collapsing. Why is KuCoin risky? Is a KuCoin crash going to really happen?
What is KuCoin (KCS)?
KuCoin is a global cryptocurrency exchange that has a user base of around 6 million. Traders can get a variety of offerings in trading like Spot, Margin, and Futures. This exchange offers nearly 600 cryptocurrencies supported on its platform. KCS is the native token of the KuCoin exchange. It can further decrease their trading fees and other swap charges.
Why is KuCoin risky?
When the crypto crash started to happen at the beginning of 2022, the Terra foundation failed to keep the peg on its UST stablecoin. This resulted in the crash of the Terra company, along with its LUNA coin. Everyone who invested in Terra lost significant amounts. Apparently, KuCoin happens to be the 4th largest hodler of LUNA, and an avid investor in the Terra ecosystem. Some info is surfacing that KuCoin’s loss amounts somewhere around $500,000,000.
It is no secret that most companies invest their money in other crypto projects. However, the source of the funds should be from the additional investments and reinvestments. KuCoin apparently used depositors’ money and bought into LUNA, then lost it all. We at CryptoTicker already warned about KuCoin in a previous article when we spoke about crypto companies that might collapse soon. Apparently, this is becoming more serious by the day.
3 Reasons why KuCoin is about to Collapse
There are many indicators that prove how KuCoin is not doing well. Here are 3 reasons for what’s going on.
- KuCoin is failing to process more than 90% of the withdrawal request
- A whistleblower exposed how the company threw away depositors’ money and gambled on LUNA
- KuCoin is seeking large sums of investment rounds – most probably to be able to stay afloat
Despite all the above, the CEO of KuCoin denied all the above-mentioned claims in a tweet, saying that all the news that is surfacing is pure FUD. Who is in the right? Well, if you had +$10,000 sitting in KuCoin, would you leave them there?
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