KuCoin Addresses 77% BTC Reserve Drop Allegations
On May 6, 2025, KuCoin denies 77 percent BTC reserve drop KYC claims, refuting reports that its mandatory Know Your Customer (KYC) policy led to a massive withdrawal of Bitcoin. CryptoQuant’s Onchain School data suggested a 77.6% drop in KuCoin Bitcoin reserves 2025, from 18,300 BTC to 4,100 BTC, following KYC rumors on June 5, 2023, and the official mandatory real-name system announcement on June 28. KuCoin called the data “factually incorrect and highly misleading,” stating that its actual holdings remain strong. The exchange emphasized its compliance with global anti-money laundering regulations and highlighted its latest Proof of Reserves (PoR) report, showing a BTC reserve ratio of 106%, with user assets at 9,751 BTC and wallet assets at 10,306 BTC.
Background of KuCoin’s KYC Policy Changes
The KuCoin mandatory KYC rollout 2023 was part of its efforts to align with global anti-money laundering regulations. The policy, effective from July 15, 2023, required new users to complete identity verification to access full services, while existing users without KYC faced restrictions on deposits. This shift came amid legal pressures, including a 2024 U.S. indictment for violating anti-money laundering (AML) and KYC regulations, resulting in a $297 million fine and a two-year U.S. market exit. KuCoin stated that the KYC upgrade aimed to enhance platform security and curb illicit activities, a move reflecting broader crypto exchange compliance trends.
Impact on KuCoin Bitcoin Reserves 2025
Despite KuCoin’s denial, Onchain School reported a significant decline in KuCoin Bitcoin reserves 2025, attributing it to user sensitivity to privacy policies. The alleged 77.6% drop raised concerns about user trust and the exchange’s stability. However, KuCoin urged CryptoQuant to exercise diligence in reporting, arguing that unverified claims could harm market confidence. The exchange’s PoR report counters the narrative, showing overcollateralized BTC holdings, which aligns with crypto exchange compliance trends as platforms increasingly adopt transparency measures to reassure users.
What This Means for Crypto Exchanges
The KuCoin denies 77 percent BTC reserve drop KYC claims saga highlights the tension between regulatory compliance and user privacy in the crypto space. As global anti-money laundering regulations tighten, exchanges face challenges in balancing user retention with legal obligations. KuCoin’s experience underscores the importance of transparent communication and robust reserve reporting. Industry experts at TOKEN2049 Dubai 2025 noted that such incidents could push more exchanges to prioritize compliance while addressing user concerns about data privacy.
