One of the most preferred exchanges on the industry these days, Kucoin, continues to be entangled in a series of FUDs relevant to liquidity difficulties and “opacity” in trading pursuits.
On July 23, a Twitter consumer named “otteroooo“published a series of proof that the KuCoin exchange is hiding on investment losses by leveraging consumer deposits.
Does KuCoin consider a hefty reduction due to LUNA / UST?
The very first is a story linked to the collapse of LUNA / UST in May, otteroooo explained that KuCoin is the favored CEX exchange for consumers to trade LUNA / UST for the reason that KuCoin has the benefit of connecting right to the Terra blockchain.
So consumers who obtain UST on KuCoin can send UST right to the Earth ecosystem to use any dApp on Earth, particularly ANchor Protocol – Terra’s “backbone” DeFi protocol with curiosity charges up to twenty%. And if consumers want to place LUNA on the Ethereum blockchain to make cash by DeFi solutions like agriculture, they have to have to use wLUNA (the LUNA token represented on ETH).
The LUNA coin exists on the Terra blockchain
if consumers wished to deliver LUNA to the Ethereum blockchain, wrapped LUNA (wLUNA) had to be applied.
wLUNA is LUNA’s ERC common
given that do kwonman has now launched a LUNA two., the previous LUNA is named LUNC
the previous shrouded moon is now wLUNC pic.twitter.com/oDigIO5qUM
– otteroooo (@otteroooo) July 23, 2022
Since LUNA / UST fell into the “death spiral” in May 2022, wLUNA has also plummeted from USD 80 to significantly less than . Most investment money invested in LUNA stand out as Binance, Three Arrows Capital, Galaxy Digital or Pantera Capital are all badly impacted. Unexpectedly, the exchange that holds the most wLUNA at the minute is none other than KuCoin, with virtually 27% of wLUNA’s complete provide circulating on the industry.
whoever held LUNA or wLUNA was #REKT
but WHO stored wLUNA?
in May 2022 the prime holder of wLUNA was …
** KUCOIN **
no goodooo
🦦 🦦 💩 💩https://t.co/pQisXlmfwZ
– otteroooo (@otteroooo) July 23, 2022
It is popular for an exchange to grow to be the key holder of the complete provide of a provided token on the industry, for the reason that it is the organization that manages users’ money, just for the reason that a lot of traders deposit their listed money on an exchange for trading functions, like Binance. However, the situation of KuCoin is quite diverse, the exchange does not have a wLUNA trading pair. Also, this is not a consumer deposit as wLUNA is not accepted as a deposit on KuCoin.
seeking at blockchain data these days
Self @kucoincom had the very same quantity of wLUNA these days and prior to the accident
would have misplaced a industry worth of …
$ twelve,000,000,000 ++
far more than twelve billion bucks !!
note: LUNA’s industry capitalization prior to the collapse was roughly $ forty billionhttps://t.co/PQfXaz2zvb
– otteroooo (@otteroooo) July 23, 2022
Therefore, otteroooo presents two achievable prospects, a single is for Kucoin to produce a personal fund by working revenue this kind of as exchange charges and then “bet” by getting wLUNA and dropping anything when LUNA / UST collapsed. In the 2nd situation, Kucoin could have applied the users’ cash right on the exchange to “invest” wLUNA behind them and go bankrupt.
Scenario B: Kucoin applied depositors’ coins to spot bets on the industry, behind consumers
the bet failed spectacularly
the two situations are not buenooooo
🦦 🦦
– otteroooo (@otteroooo) July 23, 2022
Witness “testimony” inside of KuCoin
otteroooo also advertised evidence of a KuCoin employee’s message, confirming that the exchange had without a doubt “played all hands” on LUNA and misplaced up to $ 500 million. This individual is presently leaving KuCoin to prevent dealing with the difficulties of the exchange.
… primary to a big equity hole in Kucoin’s stability sheet
the most fatal truth is that Kucoin was UST’s quantity a single assistance exchange
include to the truth that the exchange was shifting consumer deposits
there are programs to hold a downsizing round following even more fundraising pic.twitter.com/ATYjbezp4d
– otteroooo (@otteroooo) July 23, 2022
“Hi, I’m a KuCoin worker. Kucoin lately raised capital, which questioned a group of KuCoin workers, as KuCoin was working profitably as claimed by the company’s management for the reason that the LUNA / UST crisis brought about Kucoin * to fly ** 400-500 Millions of bucks.
The far more hazardous truth is that KuCoin is UST’s quantity a single assistance exchange mixed with the truth that the exchange has began moving consumer deposits in a planned method in planning for a layoff following raising far more capital.
Indeed, in September 2020, KuCoin was hacked with $ 275 million and in May 2022, just prior to the LUNA / UST collapse, KuCoin raised $ 150 million at a $ ten billion valuation and quickly following, in 07 / 022, KuCoin continued to increase $ ten million from Susq.
Because by raising capital only $ ten million following only three months raising $ 150 million, otteroooo I suspect this is just a move that adds credibility to the neighborhood that Kucoin is nonetheless executing nicely.
why increase this kind of a compact sum, just 3 months following raising $ 150 million?
is this an emergency financing?
the otter suspects that this suspicious raise of only $ ten million adds credit score to Kucoin’s informant
that Kucoin definitely lacks the money to honor all withdrawals
– otteroooo (@otteroooo) July 23, 2022
otteroooo went on to say the whistleblower had a major conflict with KuCoin CEO Johnny Lyu. After all, otteroooo determined to send a message right to Mr. Johnny Lyu to “expose” the complete reality, but it appears that the CEO of KuCoin nonetheless denies anything but there is no fair explanation for that. otteroooo.
as you may well know, the otter is chatting @lyu_johnny on DM to come across out the reality
once again denied Kucoin obtaining publicity to wLUNA, wLUNC
who must you feel?
Kucoin worker reporting irregularities and immutable blockchain?
or
CEO of Kucoin?
you choose anon pic.twitter.com/qAmweGCRpe
– otteroooo (@otteroooo) July 23, 2022
KuCoin CEO voiced the correction
Very speedily, KuCoin CEO Johnny Lyu posted a website on the exchange’s official internet site to make clear the incident. He mentioned the current FUDs made by otteroooo it really is receiving ridiculous and every single time otteroooo get in touch with the CEO, he did his greatest to response this account’s query.
This FUD was yesterday.
Short translation:
– No publicity to LUNA and wLUNA
– The current fundraising has absolutely nothing to do with the downtrend in the industryI’ll reveal the complete conversation among me and @otteroooo In brief. We make clear anything but the otter is nonetheless FUD. pic.twitter.com/mUHXwnxrDo
– Johnny_KuCoin (@lyu_johnny) July 23, 2022
However, even even though KuCoin explains anything, otteroooo he nonetheless ignores the reality and continues to deliberately spread his FUD. While other consumers have openly admitted that their assumptions had been incorrect, otteroooo nonetheless quite stubborn
In brief, most of the conversation among Mr. Johnny Lyu and otteroooo revolves all over wLUNA. This account asked if Kucoin was exposed to wLUNA, he mentioned “NO”.
After, otteroooo asked why there are so a lot of wLUNAs in the KuCoin portfolio. Johnny Lyu explained that prior to the LUNA incident, KuCoin supported LUNA (now LUNC) transactions in two key chains: the Terra and ERC-twenty blockchains. And at the time, the LUNA token on the ERC-twenty was named Wrapped LUNA (wLUNA).
The final query otteroooo KuCoin constantly supports wLUNA deposit and withdrawal. Kucoin’s CEO shared that ERC-twenty LUNA was supported in January 2021 and the services was suspended in May 2022. That was the finish of the conversation.
Furthermore, the CEO of KuCoin also mentioned that as an exchange, most of the money in the KuCoin wallet do not belong to KuCoin, they belong to the consumers. Therefore, it is KuCoin’s accountability to safeguard assets and be certain that consumers can constantly thoroughly retire anytime they want. Having a wallet that holds a lot of wLUNAs does not automatically indicate that KuCoin unilaterally holds a lot of of these tokens.
As for the accusation of the KuCoin worker, he claimed that this action has no which means for KuCoin for the reason that otteroooo are not able to show that this individual is a former KuCoin worker. Such fake pictures can be very easily made.
Finally, the CEO of KuCoin uncovered that he has also observed himself that some industry stakeholders are producing accusations to the contrary. otteroooo is striving to revenue from the spread of FUD or even from the blackmail of some platforms.
Synthetic currency 68
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