The CEO of KuCoin Johnny Lyu has addressed the rumors that the exchange is insolvent and could halt withdrawals in the coming days.
The rumors emerged through a tweet from a now-deleted Twitter account of Otteroooo, on July 23. Otteroooo claimed to have access to insider information that points to the crypto exchange insolvency.
According to the tweet, the exchange may not have enough funds to honor users’ redemption.
However, Lyu has debunked these rumors and described them as ridiculous. He explained that the KuCoin team tried to clarify the situation with Otteroooo, who continued to ignore the facts and spread FUDs.
In the blog post to clarify the exchange position, Lyu also shared the full conversation between him and Otteroooo, which revolved mostly around wLUNA and whether the exchange had LUNA exposure.
Lyu denied KuCoin had exposure to LUNA and explained that all the LUNA in its wallets belonged to users.
It is our responsibility to keep them secure and make sure users can always withdraw in full whenever they want. Having a LUNC wallet does not necessarily mean KuCoin as a company is holding lots of LUNC tokens, and I’m sure the difference is obvious.
This is not the first time that rumors of KuCoin insolvency will surface. Earlier this month, there were rumors that the exchange lost significantly due to Terra’s collapse.
The CEO denied the rumors at the time and said the exchange doesn’t have exposure to Babel and Three Arrows Capital. He also threatened to sue those spreading FUD about the exchange.
It is not only Lyu that has questioned Otterooo’s credibility. Another member of Twitter’s crypto community, FatmanTerra, called the claims “fear-mongering.”
“The entire premise of your thread is incorrect. KuCoin *did* support and actively accept wLUNA deposits (although for trading and balance purposes, they were credited directly as LUNA, similar to USDT on Tron being combined with USDT on Ethereum),” he tweeted.
Meanwhile, this is not Otteroooo’s first accusation that has turned out to be shady. Crypto lender and exchange Nexo published an expose on the account, revealing its tactics for spreading FUD.
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