“77% Bitcoin evaporated? KuCoin angrily refutes rumors, the truth behind the KYC storm revealed!”

Since the mid-2023 implementation of the mandatory “Know Your Customer” (KYC) policy, the global trading platform KuCoin has come under fire due to a significant decrease in Bitcoin reserves. Onchain School, an on-chain data company, claims that KuCoin's BTC reserves plummeted from 18,300 to 4,100, a drop of as much as 77.6%. This news sparked widespread attention and skepticism in the market.

However, KuCoin quickly denied the accusation, publicly stating that the relevant data is “severely inaccurate,” and claimed that the platform's current BTC reserve coverage is still at 106%. KuCoin accused CryptoQuant of releasing unverified misleading information and called for them to fulfill their responsibilities.

Onchain School, on the other hand, insists that the outflow of funds closely coincides with the timing of the KYC policy's enforcement. Data shows that as soon as rumors of KYC reform emerged, BTC began to be withdrawn on a large scale. By June 28, 2023, when KuCoin announced that new users must complete real-name verification by mid-July, the outflow intensified further.

Although BTC reserves across the entire industry have declined, KuCoin's drop appears particularly severe. Analysts point out that this reflects a heightened sensitivity among some users regarding privacy rights, especially when faced with tightening policies, leading them to prefer asset transfers.

There is also deeper pressure behind the policy adjustments. In 2024, U.S. prosecutors sued KuCoin for violating anti-money laundering regulations, accusing it of failing to fulfill KYC obligations for years and allowing a large number of suspicious transactions. Ultimately, KuCoin reached a settlement with U.S. authorities, agreeing to pay nearly $300 million in fines and to exit the U.S. market for at least two years.

As part of compliance, KuCoin upgraded its KYC system. Except for the main account, regular sub-accounts are not currently affected by real-name requirements, but broker accounts accessed through APIs must still undergo full verification.

In the midst of privacy and compliance, KuCoin is struggling to find a balance, and the true cost of this turmoil may have just begun.