KuCoin, one of the leading cryptocurrency exchanges, has reported a staggering outflow of $1.78 billion from the Ethereum and Ethereum Virtual Machine (EVM) chains.
According to on-chain analytics firm Nansen, there has been an outflow of over $842 million on Ethereum and $938 million on EVM chains over the last 24 hours, amounting to a total of $1.78 billion.
Estimated from an initial $6 billion base in holdings, this represents more than a 15% drop in assets held by the exchange.
According to Nansen, a look at chains beyond Ethereum and other chains like Bitcoin and Solana indicated a drop of $818 million.
Since the news broke that KuCoin and two of its founders had been charged with breaking anti-money laundering rules by U.S. federal prosecutors, there has been an increase in withdrawals from the platform. The exchange also recorded outflows of stablecoins in response to the news.
On Tuesday, U.S. prosecutors charged KuCoin and two of its founders for failing to comply with U.S. anti-money laundering rules. The Commodity Futures Trading Commission, which controls derivatives markets, filed a lawsuit against the firm on the same day.
KuCoin CEO reacts
"As the People's Exchange, we prioritize user asset security above all else. All operations, including deposits and withdrawals, are normal," Kucoin CEO Johnny Lyu said in a reassuring statement to users, while adding that legal matters were being handled by the legal team.
Lyu added, "The challenge we're facing is not unique to KuCoin but rather typical growth and regulatory issues encountered by emerging industries. Early-stage development often sees regulatory gaps, but as the industry matures, we move towards and embrace compliance and standardization."
KuCoin is one of the largest spot crypto exchanges in the world, with a daily trading volume of more than $2 billion, according to CoinMarketCap. The exchange holds over $6 billion in assets across Ethereum, Bitcoin, Solana and other chains.