- Kucoin CEo Johnny Lyu has denied that the company is about to lay off staff
- Lyu was responding to persistent rumours about Kucoin’s solvency
- Kucoin customers were recently advised to move coins off the platform by a three-month old Twitter account
Crypto exchange Kucoin has been hit with what seems like more FUD after suggestions that it was laying off employees due to the impact of the crypto winter. The suggestions, which have been denied by the company, come two weeks after unsubstantiated rumours that Kucoin was insolvent. Kucoin has said that far from laying off people it is hiring them, primarily in the fields of tech, compliance and marketing. The rumours could be an attempt to bring the price of the platform’s KCS token down, favouring manipulative short sellers.
Kucoin Denied Solvency Issues
Kucoin launched in September 2017 and quickly became a favourite for pre-Binance gems. It survived the 2018/19 bear market, but, according to some sources, was faring worse this time round because of exposure to the ‘crypto contagion’ sweeping the space.
A three-month old Twitter account was responsible for an alarming tweet for users to remove funds from Kucoin, with suggestions it was insolvent spreading quickly. This caused a 15% drop in the price of KCS before CEO Johnny Lyu reassured users that there were no plans to halt withdrawals and that everything was operating as normal.
Two weeks later and more FUD has been thrown at the exchange, with blockchain reporter Colin Wu citing “market rumors” as a source that Kucoin was planning to lay off employees:
Market rumors that KuCoin has started layoffs. KuCoin responded that there will be no large-scale layoffs similar to other platforms, and 300 positions are still open. At present, only regular assessments are conducted, and employees with poor assessments may leave.
— Wu Blockchain (@WuBlockchain) July 11, 2022
Lyu was again forced to deny the rumours, telling Coindesk that “Kucoin has not reduced staff and does not plan to do so,” once again proving that market rumours are not a trusted source of information.
Manipulation to Blame?
The reason for the FUD could be simple, good old fashioned market manipulation, with whales shorting the KCS token and then planting fake news about the exchange to bring the price down.
The same Twitter account has now moved onto warning about other lending platforms, including Nexo, so their legitimacy will soon be judged by how that pans out.
