- KuCoin has denied claims that its Bitcoin reserves dropped by 77.6% following the implementation of mandatory KYC requirements, calling the data “factually incorrect and highly misleading.”
- The exchange emphasized its strong reserve position and commitment to regulatory compliance amid rising industry scrutiny.
KuCoin, one of the world’s leading cryptocurrency exchanges, has firmly denied claims that it experienced a massive 77.6% drop in its Bitcoin (BTC) reserves following the rollout of mandatory Know Your Customer (KYC) requirements. The allegation, originally made by analytics platform Onchain School, cited on-chain data indicating a decline from 18,300 BTC to 4,100 BTC between June 5 and June 28, 2023.
The report suggested that KuCoin users withdrew substantial funds to avoid compliance with new identity verification protocols, introduced in response to growing regulatory scrutiny. However, KuCoin labeled the claims as “factually incorrect and highly misleading,” asserting that its BTC reserves remain strong and fully accounted for.
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According to KuCoin’s official transparency report, the platform currently maintains a BTC Reserve Ratio of 106%, with user assets totaling 9,751 BTC and wallet assets at 10,306 BTC. The exchange criticized Onchain School for publishing unverified information that could undermine user confidence and misrepresent the exchange’s financial standing.
The reserve drop coincided with the June 28 announcement that all new users would be required to complete KYC verification by July 15. While Onchain School linked the 14,000 BTC outflow directly to that announcement, KuCoin argued that broader industry trends and increasing regulatory pressure—especially from U.S. authorities—have influenced market behavior.
The KYC update followed allegations from the U.S. Attorney’s Office that KuCoin violated anti-money laundering (AML) laws by failing to register with FinCEN and operating without adequate compliance mechanisms. The exchange ultimately agreed to a $297 million settlement and temporarily exited the U.S. market.
Despite the controversy, KuCoin reaffirmed its commitment to transparency and regulatory compliance. It emphasized that KYC implementation is a necessary step toward protecting users and meeting global AML standards, not an indication of operational weakness.
“User privacy is important, but regulatory compliance is non-negotiable,” the exchange said in a statement, doubling down on its stance amid a shifting legal landscape for crypto platforms worldwide.
