KuCoin CEO Denies $500M Insolvency Claim by Whistleblower

Following the recent crypto market crash that led to the collapse of several crypto-focused projects such as Terra Network and Three Arrows Capital (3AC), Crypto Twitter has been filled with circulating rumors of more crypto firms edging towards a collapse, thereby raising FUD – fear uncertainty, and doubt – among investors.

KuCoin CEO Johnny Lyu has addressed a circulating rumor by Twitter user Otteroo, who claims that the crypto exchange has become insolvent, with a hole up to $500 million in its balance sheet. According to Otteroo, KuCoin has exposure to the failed Wrapped LUNA (wLUNA).

KuCoin CEO Denies $500M Insolvency Claim

According to a Saturday tweet by Otteroo, who claims to be a group forecasting sleuths in crypto, the information about KuCoin being insolvent was revealed to them by a former employee of the company. 

In a reply to the tweet, Lyu denied the claim, saying that Ottero is only spreading FUD and that KuCoin has no exposure to Luna and wLuna, adding that its recent fundraiser has nothing to do with the market downturn. 

KuCoin CEO: No Exposure to wLUNA

Lyu noted in a blog post released hours after his tweet that he had discussed with Ottero, telling them KuCoin did not have wLUNA exposure and also explained why there are many wLUNA in KuCoin’s wallet.

“I explained that before the LUNA incident, KuCoin supported LUNA (now LUNC) transactions in two chains — mainnet and ERC-20. And at the time, the LUNA token on ERC-20 is called Wrapped LUNA (wLUNA),” he said.

The KuCoin CEO also said he explained to Ottero that wLUNA deposit and withdrawal were supported on the exchange in January but suspended the service in May.

Not the First Time

This will not be the first time Lyu has denied rumors spread by Ottero. Earlier this month, the group in a tweet, warned customers to withdraw from KuCoin immediately.

At the time, the CEO urged investors to beware of FUDs, and that KuCoin has no intention to suspend withdrawals.

The most recent rumor has negatively affected KuCoin’s native token, KCS, which is currently trading at $10.06, down 2.87% on the day.

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