Kucoin Cryptocurrency Exchange has denied claims that BTC reserves have declined since KYC rumors began on June 5, 2023, and that official announcements of mandatory real systems have declined on June 28.
The overall decline in centralized exchange reserves is an industry trend, but the sharp decline in Kucoin has attracted attention. The analytics company claimed it emphasized that users were extremely sensitive to privacy and compliance policies.
Kucoin refutes claims that it will lose more than 77% of its BTC reserve
The data presented is factually incorrect and highly misleading. Kucoin maintains a strong BTC reserve and these numbers do not reflect our actual holdings.
We are deeply concerned about the disclosure of such unverified claims and urge @cryptoquant_com to act responsibly.
-Kucoin (@kucoincom) May 6, 2025
The world’s largest digital asset exchange, Kucoin has seen its Bitcoin reserves drop dramatically since mid-2023 when it revealed its customer (KYC) requirements. Onchain School acknowledged that Kucoin has seen a significant 77.6% decline in Bitcoin Reserve since that period.
The Analytics Company noted that the exchange’s BTC reserve has dropped from 18,300 BTC to just 4,100 BTC. The reserve drop began after rumors that a KYC overhaul had surfaced on June 5, 2023.
“The data presented is incorrect in fact and very misleading. Kucoin maintains strong BTC reserves, and these numbers do not reflect our actual holdings.”
–Kucoin.
Virtual Asset Exchange has confirmed its deep interest in publishing “This unverified claim.” Kucoin also encouraged encryption to act responsibly and exercise greater diligence when sharing data that could affect market trust.
According to the official Exchange website, the BTC reserve ratio is 106% at the time of publication. Crypto exchanges too recording Approximately 9,751 BTC user assets, 10,306 BTC wallet assets.
Onchain School shows a 77.6% decrease in Kucoin’s BTC reserve
Kucoin loses more than 77% of BTC preparation following KYC’s mandatory announcement
“On-chain data shows a net spill of 14,200 BTC, down from 18,300 BTC to just 4,100 BTC, a 77.6% drop.” – @onchainschool pic.twitter.com/dcnjehbtdv
– cryptoquant.com (@cryptoquant_com) May 5, 2025
Cryptoquant confirmed that the leak has risen following the official announcement of the exchange on June 28th, with all newly registered users required to complete KYC verification on July 15th. OnchainSchool claimed that a total of over 14,000 BTC is closely correlated with the timeline of KUCOIN’s announcement.
The Kucoin case stands out in its speed and scale despite the wider trend in exchange reserves in the industry. Onchain School argued that the timing and magnitude of this spill correlate strongly with KYC enforcement. The Analytics Company also added that the change highlights how compliance-related changes will affect users, particularly when privacy is perceived as being at risk.
Source: Cryptoquant. Kucoin’s Bitcoin Exchange Reserve.
Kucoin argued that existing users also need to complete KYC to access key services, including new deposits. Exchange users are restricted access to features such as withdrawals and meal reimbursement.
Exchange KYC upgrades have been part of an effort to align with global money laundering (AML) practices. Kucoin cited money laundering obligations and global compliance standards as reasons for the shift.
The increased US legal pressure was also the cause behind this policy change. In 2024, the US Lawyer’s Office said the exchange and its parent company, Peken Global Limited, violated US money laundering and KYC regulations.
US lawyer Daniel R. Sasson deliberately circumvented the enforcement of basic AML regulations, claiming that Kucoin could not register as a money service business with Fincen. The indictment noted that the exchange allowed billions of dollars to pass through its platform in suspicious transactions.
The indictment also argued that for years there were no meaningful KYC or AML programs on the exchange despite serving more than 1.5 million U.S. customers and collecting fees of more than $184 million since 2017.
Exchanges are due to a restrictive environment of global regulations and anti-money laundering practices; “Kycoin will implement the mandatory KYC.” The exchange has agreed to withdraw from the US market for at least two years, paying a $297 million fine as part of the settlement.
The exchange noted that there is no web interface and therefore the KYC of the broker subaccount must be submitted via the API. Kucoin added that users must only check once per account, and that regular sub-accounts created under the master account are not affected by the KYC rules.
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