on the crypto
In another climate, rumors on social media that the cryptocurrency exchange KuCoin may be in trouble would almost certainly be ignored. However, in the current nervous market, many have taken seriously a pseudonymous tweet of a person whose handle is "otteroooo". KuCoin CEO vehemently denied that the platform has any problems.
The collapse of the LUNA ecosystem (here the quotation in real time) of Terra has shaken the foundations of the cryptocurrency industry. Several decentralized lenders have frozen withdrawals, and a major cryptocurrency insider claims other platforms will fall. Even a hint that a platform is in trouble can cause panic, and it's hard to know what to believe. Here's what we know about the KuCoin saga:
1. Otteroooo tells investors to withdraw their funds
Last week, otteroooo tweeted a warning to KuCoin customers telling them to "withdraw from KuCoin immediately". The account has only been active since March, and the feed contains a constant stream of comments on issues faced by other cryptocurrency platforms. But how reliable is the source? The phrase "Otter is hardly wrong in these things" is not exactly convincing.
Otteroooo followed with two more messages. One insisted that "Otter does not have, did not have, will not have any short or long positions in $ KCS". KCS is KuCoin's native token. The other said: "Otter has an ongoing discussion with @lyu_johnny from kucoin to confirm the results, because he contacted."
2. KuCoin chief executive denies rumors of insolvency
Johnny Lyu immediately intervened on Twitter to assure investors that "there is no plan to block withdrawals, everything on KuCoin works well". Lyu shared some information about KuCoin's operations and told people to make their own judgments. These include:
- Completion of a $ 150 million fundraising round with a valuation of $ 10 billion in May.
- It is one of the few cryptocurrency platforms that is still hiring. Other grants have laid off staff in recent months.
- The platform launched new features, even during the bear market.
Finally, Lyu said the company will release the H1 2022 report with more details on KuCoin's operations. He warned that he reserves the right to take legal action against those who intentionally spread FUD. FUD refers to fear, uncertainty and doubt and is used to describe the dissemination of misinformation.
Is it possible to withdraw again?
The difficulty for KuCoin is that the CEO of Celsius told users their funds were safe just days before the platform blocked withdrawals. People don't know who to trust. With little regulation controlling the behavior of platforms and the information released to whom, solid ground is hard to find.
What is certain is that Lyu has more credibility than a pseudonymous Twitter character. Also, I had no problem withdrawing from KuCoin today, several days after the first tweet. Other KuCoin clients have reported on social media that they were able to withdraw the funds.
My withdrawal, coupled with the fact that KuCoin is still hiring and hasn't spent a lot of money on huge ad campaigns, suggests that otteroooo's comments may be unfounded. I am also suspicious that otteroooo did not provide the promised details to back up his claims. However, given the levels of uncertainty that characterize cryptocurrencies right now, I'd rather be safe than sorry.
