A Letter from KuCoin CEO
I consider myself a lucky man when I got into crypto in 2012 when Bitcoin was below $100. Later in 2017 I cofounded KuCoin. Since then, we have been through many ups and downs together with the market. We have experienced the ICO craze in 2017 first-hand, and we prevailed through the long bear market that started in 2018. Despite the whirlwinds surrounding the market recently, now is the best time to build and come together for the entire industry.
Today, the total value of the industry still stands at less than 1 trillion USD, which is 40% of the market cap of Apple. Still very few people in the world today hold crypto. On the product side, many business models have been tried and failed, and new paradigms are slowly emerging. We are still early adopters and I share the same strong belief that crypto adoption is only going to increase.
We wish nothing but the best for our whole industry, all of our competitors included. Back in 2017, we were just a group of techies who had a naïve belief that we can make a change in the world. We saw what bitcoin can do to the financial industry and decided to go all in. The industry has matured so much over the past 5 years: we went from a small group of tech builders to a 10Bn dollar company today, that is dearly named by our users as ‘the People’s Exchange’. However, we kept our old-fashioned style when it comes to managing assets and risks. I do realize that KuCoin has always been the low-profile underdog in the market, and it sometimes surprises people that we have more than 27 million users. Being in the crypto industry is a humbling experience. The gene of our team is always respecting the market and letting our product do the talking. Our values have remained consistent throughout the years: customer first, security focused and tech driven.
In the past 12 hours, the market has experienced several periods of extreme volatility and panic. I was lost for words when I saw the FUD on KuCoin again today. This is probably the tenth time in the past 6 months some rumor on Twitter circulates that KuCoin is ‘insolvent’. I am very thankful for all the friends and users’ support when they try to help us fight FUD by articulating the facts that they have just withdrawn successfully. Countless people voiced their support for us voluntarily on Twitter and various other channels. KuCoin will forever be grateful for those who stand beside us.
Many people may not know, but we had a hack incident in 2020. Hackers stole more than $275 million worth of cryptocurrency, and it almost caused a liquidity crisis on the exchange. That was a daunting time when KuCoin was just a small exchange. And yet, we covered 100% of our user’s funds and repaid them all. We always put customers first, even if it meant back then that we had to remain unprofitable for a long time. This was a key lesson for us.
Luckily, we have emerged to become one of the largest exchanges in the world. Today, we have over 27 million users in more than 200 countries. Our cash reserve is stronger than ever, and given our history, we have always respected the market by keeping users funds safe and untouchable.
I would like to address a rumor that came out today. It was sparked by a Nansen exchange stablecoin outflow chart, showing that 300M USD had left KuCoin. We went to great lengths to clarify with Nansen that it was mainly a currency translation from ERC20 USDT to TRC20 USDT, and the transaction can be verified on the explorer screenshot below. Nansen acknowledged that they only track ERC 20 tokens, so the TRC20 USDT did not show up and was mistakenly interpreted as an outflow. We are grateful Nansen acted swiftly and posted an explanation on Twitter.
Coindesk updated the report about KuCoin ERC20-USDT / TRC 20 USDT Swap indicating that Nansen data only shows Ethereum-based stablecoin, it didn’t show the inflow of the same amount TRC20 USDT.
We have seen many questionable rumours regarding KuCoin in the past few months like this and yet our users keep on growing. We will like to appeal to all builders and believers of the industry to kindly verify all information before taking any actions caused by FUD. I strongly believe we need to work together as an ecosystem and build.
To further emphasize our stance again, our vision is that one day everyone in the world will get involved with crypto. The founders are doing everything to contribute to that cause. We promise our users that, just like in the past, we would never misappropriate user funds and we will ensure full transparency. KuCoin will always guarantee 1:1 withdrawal.
And lastly, to those who are still concerned, we will release our Merkle tree proof-of-reserves or POF in one month. Right now, we are working closely with authoritative auditors to ensure the accuracy and truthfulness of the numbers and information we provide to our users, and to further build confidence and transparency in the industry.
Let’s embrace this opportunity for the industry to come together and exercise self-regulation. KuCoin will spearhead various initiatives together with our partners to drive more industry standards.