KuCoin Faces Over $1.1 Billion In Outflows After Recent DoJ Action

Despite outflows, KuCoin's Ethereum hot wallets hold over $3.6 billion, showcasing its enduring presence in crypto.
By Bhushan Akolkar
KuCoin to Enforce 7.5% VAT on Fees for Nigerian Users from July 8

Highlights

  • KuCoin's Ethereum wallet drained by $500 million hours after indictment by the DoJ.
  • KuCoin's still retain $3.6 billion of assets on the Ethereum blockchain.
  • CFTC classifies ETH as "commodity" in its indictment against KuCoin.

Massive outflows have ensued at the crypto exchange KuCoin after the U.S. Department of Justice indicted KuCoin over the violation of anti-money laundering rules and Bank Secrecy Act regulations. There have been massive withdrawals taking place on the crypto exchange KuCoin as investors rush to pull their assets out.

Over $1.1 Billion Withdrawn From KuCoin

Data from 0xscope reveals a notable development in KuCoin’s asset movement, with the exchange witnessing a substantial net outflow of approximately US$1.195 billion within the last 24 hours.

On the other hand, SpotOnChain further highlights the impact of these developments, indicating that a considerable sum of approximately US$500 million has been withdrawn from KuCoin’s Ethereum wallets in response to the US government’s criminal complaint. Among the assets withdrawn are 274 million USDT, 15,500 ETH, 50 million ONDO, 12 million FET, and 95.38 million GHX, among others.

Despite the asset outflow, KuCoin’s hot wallets still retain over $3.6 billion worth of assets on the Ethereum network, underscoring the exchange’s enduring position in the cryptocurrency market.

According to reputable cryptocurrency journalist Colin Wu, three reliable sources have disclosed to WuBlockchain that KuCoin contemplated halting its operations and putting the exchange up for sale in 2023. The U.S. initiated a criminal investigation into KuCoin in the same year, and the exchange has faced scrutiny from authorities in China as well. Furthermore, individuals affiliated with various exchanges, including Binance, knew about the potential sale.

CFTC Spills the Beans

In a recent indictment against KuCoin, the Commodity Futures Trading Commission (CFTC) has categorized various digital assets, such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and stablecoins like USDC and USDT, as “commodities” in interstate commerce. This classification falls under Section 1a(9) of the Act, 7 U.S.C. § 1a(9), according to the CFTC’s statement.

This is a major development considering the fact that the U.S. Securities and Exchange Commission (SEC) has launched an investigation into the Ethereum Foundation. Moreover, the securities regulator also attempts to classify Ether (ETH) as a security. This development adds another layer of regulatory scrutiny to the cryptocurrency ecosystem, as authorities continue to grapple with the classification and oversight of digital assets.

Advertisement
Bhushan Akolkar
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.