- KuCoin saw massive outflows yesterday as holders panic over DoJ charges.
- Co-founders face allegations from the United States Department of Justice.
- On Wednesday, SHIB reclaimed $0.00003, hovering around $18bn market cap.
The United States Department of Justice (DoJ) sent ripples through the cryptosphere yesterday, slapping KuCoin, one of the globe’s leading crypto exchanges, with serious criminal charges for alleged money laundering.
Here’s What Set Off the Swirl of Huge Withdrawals
In an official statement by the DoJ on March 26, 2024, two of KuCoin’s co-founders are accused of conspiring to violate the Bank Secrecy Act by “willfully failing to maintain an adequate anti-money laundering (AML) program,” which is aimed to prevent the exchange from being used for money laundering and terrorism financing.
Sponsored
Naturally, the legal scrutiny has caused panic among KuCoin’s users, who rushed to withdraw their assets. Crypto whales have been spotted relocating tens of millions in popular stablecoins like Tether USD (USDT) and USD Coin (USDC) to competing crypto exchanges like Bybit and OKX.
Following the accelerated outflows on KuCoin, blockchain analytics firm LookOnChain spotted a 32 million USDT deposit to Bybit on Wednesday morning. According to the reserve statistics, KuCoin now holds approximately $6.137B in digital assets, including over $1bn of Bitcoin (BTC) and 3.37T, or $104.95 million of the popular Japanese guard dog-embossed Shiba Inu (SHIB).
2T SHIB Leaves KuCoin Amid Mounting Legal Troubles
Among a flurry of hefty whale transactions, a gargantuan 2 trillion Shiba Inu (SHIB) transfer was seen by Whale Alert. The 2T SHIB transfer immediately raised eyebrows in X, as cryptocurrency traders witnessed a $62,232,000 SHIB transfer on-chain.
Surprisingly, this transaction wasn’t attributed to cryptocurrency whales relocating their crypto stashes due to fear and uncertainty. On the contrary, the cryptocurrency address is tied to KuCoin’s platform, as it’s labeled ‘KuCoin 20’ on EtherScan blockchain explorer.
Further investigation by Ciphera showed that Shiba Inu is the second largest asset in the ‘KuCoin 20’ account. Worth $63,109,626 at the time of publication, the only larger crypto assets in this hot wallet are over $100 million of KuCoin’s KCS token.
On the Flipside
- The 2T Shiba Inu transfer amounts to up to 59% of KuCoin’s total 3.37T SHIB reserves.
- Most cryptocurrency exchanges tend to shift massive amounts of reserves for maintenance.
Why This Matters
KuCoin is the fourth-largest cryptocurrency exchange globally, with nearly 10 million monthly visitors. The criminal charges against the platform’s co-founders resembled last year’s, when the DoJ fined Binance $4.3 billion for similar offenses.
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