Recently, KuCoin CEO Johnny Lyu has been facing rumors about the exchange. Earlier this month, it was rumored that the exchange would stop withdrawals on its platform due to heavy losses from the collapse of LUNA. Most recently, similar speculations are circulating about the stability of KuCoin. On the KuCoin blog, Johnny Lyu detailed the company’s current position regarding its financial status.
Rumors about KuCoin’s insolvency
In a tweet on Saturday, otterooo, an account that tweets about developments in crypto, made an alarmist prediction. They stated that KuCoin would become insolvent, according to confidential information. The exchange might not have the assets to meet the redemptions of depositors, they added, referring to Kucoin’s insolvency. Reacting to this, Johnny Lyu refuted claims that his company suffered losses due to Terra’s collapse. The KuCoin CEO clarified that a majority of the funds in KuCoin wallets do not belong to the exchange but to the users.
KUCOIN INSIDER CONFIRMS KUCOIN IS INSOLVENT
EX-EMPLOYEE WHISTLEBLOWS THAT ESTIMATED HOLE UP TO $500,000,000
KUCOIN MAY NOT HAVE THE COINS TO MEET DEPOSITORS' REDEMPTIONS
Retweet & like this tweet, and read on
👇🏼 🧵 🦦
— otteroooo (@otteroooo) July 23, 2022
“It’s our responsibility to keep them safe and make sure that users can always withdraw their full funds whenever they want. Having a LUNC wallet doesn’t necessarily mean that KuCoin as a company holds a lot of LUNC tokens, and I’m sure the difference is obvious.“
“Logical errors” in the alleged insolvency rumors of KuCoin
Perhaps referring to KuCoin’s insolvency allegations, Johnny Lyu said there were many logical fallacies in the “so-called whistleblowing by KuCoin employees.” KuCoin has no exposure to LUNA and wLUNA, he added. The CEO said KuCoin has recently faced rumors from two sources, those made both unknowingly and intentionally.
Earlier this month, KuCoin denied claims that the company was about to stop withdrawals due to heavy losses from Terra collpase. KuCoin has no exposure to LUNA, 3AC or Babel, it said. At the time, Johnny Lyu threatened to take legal action against those who tried to spread confusion and denigrate the exchange.