KuCoin Will Not Freeze User Assets Even Though Allegedly Involved In Memecoin Scams

JAKARTA - KuCoin, a crypto exchange, confirmed that the address allegedly responsible for the launch of thousands of scam memecoins belonging to one of their users. However, the exchange will not freeze user assets without official notice from law enforcement.

On April 26, a Twitter user identified a wallet address that launched two to five memecoins every day for two years. Other community members showed that the wallet address was "owned and controlled" by KuCoin.

Currently, blockchain explorer Etherscan has marked the address as a fake phishing wallet. In a statement sent to Cointelegraph, the crypto exchange confirmed that the wallet address belonged to one of their users.

According to Johnny Lyu of KuCoin, although the address belongs to one of the platform's users, the exchange will not freeze the account until it receives notification from the relevant authorities.

"When those who report have provided relevant legal documents, procedures, or reporting records, we will assist and cooperate with law enforcement agencies to take temporary risk control measures in accordance with complaints and reports, user deals, and Seychelles laws," Lyu said.

In addition, the exchange told Cointelegraph that if community members find suspicious behavior, they should report it to the police and send relevant material to their team.

Lyu added that KuCoin would be happy to work together after receiving the necessary documents. The KuCoin exchange faces challenges in the past week. On April 24, the platform's official Twitter account was hacked and posted false activity, causing some of its followers to lose their assets.

After identifying the breach, the exchange worked with Twitter to restore social media accounts and promised to compensate for the losses suffered by victims affected by the hack.