The heat has been on crypto exchange KuCoin recently after a Reddit user called them out on Reddit regarding funds being held on the exchange. The user had first taken to Reddit to vent their frustrations in an open letter to CEO Johnny Lyu after making no progress with its customer support representatives. According to the user’s statements, the exchange was withholding ≈$50K worth of crypto on the exchange.
The user explained that KuCoin had that they would be supporting a new BCH fork, eCash (XEC), leading them and many others to invest in the asset on the exchange. Problems arose when the exchange had run out of liquidity for the cryptocurrency. KuCoin users realize that they could not sell their holdings without doing so at a significant loss (selling for cents to the dollar).
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However, a much sinister issue arose when they found out they could not transfer the coins out either. Since then, the user claimed that they have had ≈$50,000 worth of crypto being withheld by the exchange for over six months and still have not been allowed to move their coins.
Open Letter To KuCoin CEO
The Reddit user who goes by the username had first drawn attention to the issue when they posted an open letter to CEO Johnny Lyu about four days ago. In the open letter, they include screenshots of their communications with the support staff dating back at least six months. The user explained that KuCoin had been giving them the runaround with no real indication of solving the issue and had ‘receipts’ to back this up.
CEO Johnny Lyu had responded to this open letter about three days after posting, giving what could be described as a low-effort response to a clearly distressed user.
“Thanks for bringing it up. The upgrade is underway, and since it’s not just a simple rename or rebrand, we still need some time to complete it. Thanks for your patience and understanding,” Lyu wrote.
Reddit users had called out the CEO over the response, pointing out that the answer proved everything that the user had claimed in their post; that the exchange did not seem interested in solving their issue.
Calling On The Community
Four days after the open letter had been posted, the u/BCHcain had once again This time calling on the community to help amplify the issue, pointing out that if it could happen to them, then it could happen to anyone. This follow-up post garnered considerably more attention than the open letter.
The issue has raised concerns over the power centralized exchanges have over the funds of users. In a way, these centralized exchanges control user funds the same way as banks, something that the crypto enthusiasts are fervently trying to do away with.
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The crypto exchange had also been called out on the same platform by another user who claimed that in order to force users to liquidate and then profit from these liquidations.
KuCoin is yet to respond to the second post. However, it continues to spark conversations around issues with KuCoin and CEXes in general. As of the time of writing, the post has received 5.3K upvotes and has 1.6K comments.
Featured image from CoinDesk, chart from TradingView.com