March 28, 2024 at 10:57 GMTModified date: March 28, 2024 at 10:57 GMT
March 28, 2024 at 10:57 GMT

KuCoin announces $10M airdrop, following DOJ charges

After the DOJ charged KuCoin with violating anti-money laundering laws, the exchange announced plans to airdrop $10 million worth of $BTC and $KCS to its users.

KuCoin announces $10M airdrop, following DOJ charges

KuCoin, a leading global cryptocurrency exchange, has announced a $10 million airdrop of Bitcoin ($BTC) and its native KuCoin Token ($KCS). The announcement comes after the US Department of Justice’s (DOJ) recent charges against the exchange and its two founders, which was quickly followed by customers withdrawing almost $800 million of funds

This airdrop was disclosed in a letter from CEO Johnny Lyu on the exchange’s blog on 27 March. While it did not address the charges, the move was said to reinforce trust and support among its user base.

The letter said: “I would like to express my gratitude to all KuCoin users, for your support, trust and companionship during the past few days.”

How to qualify for the KuCoin airdrop? 

The airdrop was said to be a gesture of goodwill from KuCoin towards its users who experienced delayed withdrawal times on 26 and 27 March.

Describing itself as the “People’s Exchange”, KuCoin expressed its commitment to user satisfaction and its regret over the inconvenience caused by these delays.

The statement said: “To express our profound gratitude for your support and patience KuCoin will launch a special airdrop event totaling 10 million USD in KCS and BTC. We hope that through this initiative, we can express our gratitude for the support of our loyal users.”

KuCoin has not explained how to become eligible for this airdrop. But the exchange revealed that the rules would be announced within the next three days, and customers should be wary of any potential scams. 

DOJ and CTFC Charges

The timing of KuCoin’s airdrop announcement comes less than two days after the DOJ unveiled an indictment against the exchange for violations of the Bank Secrecy Act, including operating without an Anti-Money Laundering program and functioning as an unlicensed money-transmitting business. 

The DOJ’s statement highlighted KuCoin’s failure to register with the US Financial Crimes Enforcement Network as a money services business, a crucial legal requirement, positioning the exchange as a platform susceptible to money laundering activities linked to various illicit dealings.

Further compounding KuCoin’s legal challenges, the Commodity Futures Trading Commission (CFTC) has also initiated charges against the exchange for failing to obtain the necessary registrations for futures and swaps trading. 

Following these legal developments, KuCoin experienced a significant outflow of funds, with reports indicating that $780 million was withdrawn from the platform across different blockchain networks.

“As everyone knows, KuCoin’s journey has not been smooth sailing. Over seven years, we have faced numerous challenges,” the press statement said. It added: “We have become stronger with each challenge overcome, earning the trust of more users and industry partners along the way.”