- KuCoin CEO announces $10 million airdrop in KCS and BTC.
- KuCoin faces serious accusations from U.S. DOJ and CFTC.
- KuCoin sees $1 billion withdrawals, 20% asset management reduction post-allegations.
Johnny Lyu, the CEO of KuCoin Exchange, has declared that KuCoin is set to distribute $10 million in KCS and Bitcoin
This announcement comes after KuCoin faces serious accusations from the U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC).
In the wake of these allegations, KuCoin experienced a significant loss of confidence among its users, leading to approximately $1 billion in cryptocurrency withdrawals and a consequent 20% reduction in the exchange’s assets under management.
KuCoin’s CEO communicated through a blog post on the exchange’s official website in response to these events and to show appreciation for its dedicated user base.
I would like to express my gratitude to all KuCoin users, for your support, trust, and companionship during the past few days, as well as the past 7 years. We will absolutely ensure the security of user assets as always and comply with regulations to fulfill our trust.,
Reflecting on past compensations by KuCoin, Lyu remarked, “In the initial days of October 2017, when KuCoin was just starting, we took an industry-first step by choosing to proactively provide substantial compensation to our users following the unexpected removal of the CFD project from our list.”
He went on to say that this early initiative to compensate users was the foundation for KuCoin’s being dubbed the “People’s Exchange” – a moniker that originated from the community’s initial endorsement of KuCoin. He emphasized that they have always valued this unique trust and that being known as the “People’s Exchange” is their most esteemed title.
Nevertheless, airdrops come with their own challenges, including potential regulatory issues.
The SEC, in its “Framework for ‘Investment Contract’ Analysis of Digital Assets,” has noted: Receiving digital assets at no cost, such as through an “airdrop,” does not eliminate the possibility of meeting the investment of money criterion in the Howey test; thus, an airdrop might be deemed a sale or distribution of securities.
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