By Spencer Kellogg | @TheNewTreasury
Do you have cryptocurrency sitting in a Kucoin wallet? If you believe the accusations of one man, you might want to consider an immediate withdrawal.
In a post published to Medium late Friday evening, the allegations suggest that Kucoin’s Hong Kong offices are empty. Jackson Wong, a Hong Kong resident, had been suspicious of the cryptocurrency exchange after he looked into their board of directors and found that none of them had “Hong Kong names”. He also wondered why he had never seen any local press about one of the largest crypto exchanges in the world. When he finally tracked down the address to Kucoin’s Hong Kong headquarters, he found more unsettling news: the place was empty.
In the back of the sprawling KIU FU COMMERCIAL BUILDING, Wong was greeted at the Kucoin registered address by an employee from another company.
I asked if she had ever heard of the KuCoin Exchange or any cryptocurrency related companies there. She said she had never heard of anything of such there. She said she worked at this place for couple years already. – Jackson Wong
Twitter users were unsure of the validity of Wong’s claims. One person pointed to a press release from earlier this week that highlighted Kucoin’s international growth plans in a number of countries outside of China. Another Reddit poster suggest Wong had an axe to grind and revealed an earlier, similar post from the Medium account.
In the world of unregulated global cryptocurrency, consumers often place blanket trust in exchanges out of sheer necessity. For investors looking to purchase higher risk projects, the exchange options can be limited due to low liquidity and market legitimacy. Even larger exchanges like Poloniex and Binance have had their hiccups along the way.
Kucoin made a name for itself as a gem hunter’s paradise during the bull months of this past winter. Launching the value of coins like DragonChain, Red Pulse, Deep Onion, Odyssey, Loom, Deep Brain Chain and others, Kucoin attracted the eye of high profile traders and market makers which, in turn, sent the volume on Kucoin’s exchange soaring.
But some members of the crypto community were already speaking against Kucoin’s business practices. In April, Yazin Alirhayim, CEO of Verify ($CRED), was direct in his critique of Kucoin’s listing procedure when he lamented: “We spent 4 months chasing a company to take our $75,000 and list a token. Any business that operates in such a fashion can only go one way: down.”
kucoin should improve its security, the recent exchange testing by CER gave it the lowest rating:https://t.co/bAkMVO1Tux
— tehMoonwalkeR (@tehMoonwalker) August 9, 2018
What’s more concerning is Kucoin’s dreadful CSS (Crypto Security Score) released recently by CER. The score grades a series of security measures including Captcha, Server Security, and Multi-Factor Authorization. Regarding Kucoin, CSS was blunt:
It is worth noting that Kucoin is the only exchange covered by CER that has a very low estimated SSL/TLS connection. Also, we should consider that 15 out of 18 crypto exchanges have similar Domain Security subtotals, and only Kucoin, which is far behind all other exchanges, has a remarkably low rank.
If you’re lucky, one of the first things you learn when entering the cryptocurrency space is to “never leave your tokens on an exchange.” This is because crypto has a long, sordid history of consumers losing funds and tokens when an exchange goes belly up. In the nascent industry of digital assets, trust can be tricky. For now, it may make sense to withdraw your funds from Kucoin until they provide better-rated security and a rebuttal to today’s accusations.