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Since the latest indictment of the cryptocurrency trade KuCoin and its founders by the Department of Justice (DOJ), there was a big enhance within the variety of withdrawal actions. Nansen, an onchain analytics agency, noticed a serious exodus of funds from the platform by which greater than $200 million have been pulled from the Ethereum-based property and different EVM-compatible chains in a brief interval.

DOJ Legal Action Triggers Withdrawal Surge

According to Damian Williams, the U.S. Attorney for the Southern District of New York, the indictment costs KuCoin and its house owners with breaches of anti-money laundering and Bank Secrecy Act rules.

Mass Stablecoin Withdrawals on KuCoin Exchange

“The exchange’s reserves, in stablecoins, have decreased by more than US$100 million in the last 3 hours.” – By @caueconomy

Full publish 👇https://t.co/3CeAAq45AJ

— CryptoQuant.com (@cryptoquant_com) March 26, 2024

In the wake of this announcement, Nansen famous a fast response from the trade’s customers, with roughly $99 million withdrawn from the Ethereum chain and a further $109 million from the opposite EVM-compatible chains. This migration is a mirrored image of the neighborhood’s response to the doable authorized and operational dangers associated to the indictment.

KuCoin’s Response and Asset Security

In reply to the fees introduced ahead by the DOJ, KuCoin launched a press release that its customers mustn’t fear concerning the platform as it’s “operating well.” Additionally, it was assured that the customers’ property have been “absolutely safe.” The trade careworn its dedication to legislation compliance and transparency, promising a radical investigation by authorized channels. 

However, the massive outflows attest to a point of customers’ fear concerning the stability and way forward for their holdings on the trade.

Analysis of Withdrawals and Exchange Reserves

Meanwhile, after the announcement by the DOJ, the valuation of KuCoin’s cryptocurrency holdings was at about $5.92 billion, with an enormous chunk of such holdings in key cryptocurrencies like USDT, BTC, ETH, and its personal token, KCS.

The KCS token itself misplaced 14% of its worth after the authorized motion, buying and selling at $12.51 at press time. Particularly, the quick withdrawals of stablecoins point out that the customers are simply attempting to guard their property from the uncertainty of the trade’s legibility and operational integrity within the US.

The KuCoin case illustrates issues that exist inside the cryptocurrency trade with regard to regulatory compliance and the safety of property on exchanges. DOJ’s crackdown on KuCoin is simply part of rising tendencies to impose stricter self-discipline on the cryptocurrency platforms in addition to the need of compliance with anti-money laundering requirements and monetary rules.

Read Also: Blackrock CEO Raises Alarm on US Debt; What’s Next for Crypto Markets?

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Kelvin is a distinguished author specializing in crypto and finance, backed by a Bachelor’s in Actuarial Science. Recognized for incisive evaluation and insightful content material, he has an adept command of English and excels at thorough analysis and well timed supply.

The introduced content material might embody the private opinion of the writer and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The writer or the publication doesn’t maintain any accountability on your private monetary loss.