The CEO of KuCoin denied these allegations, saying that “everything works fine at KuCoin“. This development follows a wave of cryptocurrency companies that halted client withdrawals in response to extreme market conditions and the Three Arrows crisis.
The rumors surfaced hours after Voyager Digital announced it was freezing customer withdrawals amid the ongoing Three Arrows Capital crisis. Rumors that KuCoin may be on the brink of collapse are false, according to the company’s CEO.
Be aware of FUDs!
Not sure who’s spreading these sheer rumors, and what their intentions are, but #KuCoin does not have any exposure to LUNA, 3AC, Babel, etc.
No “tremendous suffer” from any “coin collapse”, no plan to halt withdrawal, everything on KuCoin is operating well.
— Johnny_KuCoin (@lyu_johnny) July 2, 2022
Johnny Lyu responded to speculation the company could face insolvency in a tweet storm early Saturday, saying “everything about KuCoin is working fine” and the exchange has no plans to stop withdrawals . Johnny Lyu also called it “mere rumors” discussions circulating about possible liquidity problems for KuCoin and confirmed that the company has no exposure to the Terra ecosystem, Three Arrows Capital or Babel Finance.
Rumors of KuCoin’s internal issues surfaced last Friday, hours after Voyager Digital became the latest domino to fall as part of the Three Arrows crisis. Voyager announced on Friday that it was halting customer withdrawals, deposits and transactions and that it “explored strategic alternatives” for the future of the company. Last month, it was revealed that Three Arrows had defaulted on a 15,250 bitcoin, 350 million USDC loan worth around $665 million from Voyager. Three Arrows still hasn’t made the refunds.
KuCoin raised $150 million in a funding round in May, which values the company at $10 billion. As Lyu indicated in its Saturday announcement, the company is actively recruiting despite the current market slump. Johnny Lyu added that “Transparency is still one of the key principles of [KuCoin]” and ended his message with a positive note: “Don’t FUD, BUIDL“.
The Three Arrows Crisis
Until the crisis began to develop in early June, Three Arrows was one of the largest crypto hedge funds holding over $10 billion in assets under management at its peak. When the cryptocurrency market collapsed, it appeared that the company was facing significant liquidity problems, as it had taken on debt with cryptocurrency lenders without taking into account a significant downturn. . Company co-founder Kyle Davies said the company lost $200 million on its exposure to Terra when LUNA collapsed in May, and several cryptocurrency lenders have since revealed they have exposure to Terra. the society. BlockFi loaned Three Arrows an undisclosed sum and has since signed an agreement to be acquired by FTX.US for up to $240 million with an additional $400 million revolving credit facility. Babel Finance, CoinFLEX, and Celsius also reacted to the market decline by pausing withdrawals, although none of them confirmed exposure to Three Arrows. On Friday, the struggling hedge fund filed for Chapter 15 bankruptcy in New York.
While the full extent of Three Arrows’ crisis remains unknown, several companies have been hit hard so far, and the market hasn’t shown many signs of life in the fallout. Bitcoin tumbled again on Saturday after a week of price volatility. It is currently trading at $19,260, down around 72.1% from its peak of $69,000.