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Kucoin exchange has seen its Bitcoin reserves drop by over 77% following a recent mandatory KYC requirement.
Kucoin, the Seychelles-based cryptocurrency exchange, resolved its criminal charges in January 2025, paying $3oo million in fines. This came after admitting to charges of operating an unlicensed money transmitting business while ignoring anti-money laundering protocols on its platform. The worst crypto hack of the year 2020 left Kucoin bleeding $281 million in losses after a major security breach.
As a result of these challenges, Kucoin is trying to improve its Know Your Customer (KYC) checklist. This will require gathering more information about its exchange users and their operations. On-chain data by Cryptoquant has revealed that the exchange’s reserves have dropped 77.6% following a mandatory KYC policy.
Bitcoin reserves have dropped from 18,300 BTC to 4,100 BTC, a 14,200 BTC outflow. This is a significant outflow from a major exchange in the crypto market.
The drop in BTC reserves suggests that users have been reacting to strict compliance requirements and could be shifting to cold storage or other platforms. This is because privacy concerns and custodial risks are major considerations for crypto investors and enthusiasts on crypto service platforms.
