Can you trust KuCoin with your crypto?
Did you know? Cryptocurrency losses between 2021 and 2024 exceeded $15 billion, according to Immunefi. With the crypto market’s volatility, buying the right coin and picking an exchange is essential as you might experience serious financial loss if you are not too careful.
KuCoin has faced criticism for its rules and regulations, and the 2020 hacking incident has raised concerns about its security. This blog will discuss KuCoin’s reliability and features to help you make informed investment decisions.
What is KuCoin and How Does it Work?
KuCoin is a major cryptocurrency exchange founded in 2017 and offers a wide range of trading options, including spot, margin, futures, P2P, staking, and lending. With low fees and a global user base of over 30 million, it’s a popular choice.
It offers a vast selection of over 850 digital assets, including popular choices like Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), XRP (XRP), Polkadot (DOT), and Shiba Inu (SHIB).
What are the Detailed Features of KuCoin?
KuCoin offers a comprehensive trading platform accessible via web and mobile apps (Android and iOS).
Key Features
- Diverse Trading Options: Spot, margin, futures, and P2P trading.
- Advanced Tools: Trading bot, staking, and lending.
- Low Fees: Competitive fees, especially with KCS discounts.
Security and Trust
- Multi-factor authentication, encryption, and separate trading passwords.
- Protects against potential hacks.
- A significant hack in 2020 raises concerns.
User Experience
- The platform’s complexity can be intimidating for newcomers.
- Primarily relies on live chat and ticket support.
- While some users praise low fees and diverse offerings, others report issues with customer support, withdrawals, and account security.
Account Management
- Quick and straightforward registration process.
- KYC verification is optional for increased withdrawal limits and features.
- Web and mobile app access for convenient trading.
KuCoin and Other Crypto Exchange Price Comparison
Let’s compare KuCoin with other platforms to check the benefits it offers:
What are the Security Risks of Using KuCoin?
It’s important to note that KuCoin may not be definitively unsafe. However, the charges raise significant concerns about their compliance with regulations and potential security risks.
Violation of Bank Secrecy Act (BSA)
KuCoin is accused of failing to comply with BSA regulations, which require financial institutions to identify their customers, report suspicious activity, and implement anti-money laundering (AML) programs. This raises concerns about the potential for money laundering and other illegal activities on the platform.
Unlicensed Money Transmission
The indictment alleges KuCoin operated without a license for transmitting money. This means they might not have the proper safeguards in place to protect funds.
Lack of KYC for Existing Users
Allegedly, KuCoin only implemented a Know Your Customer (KYC) process for new users after facing a federal investigation. This leaves a large number of existing users, including those in the USA, unverified. Without proper verification, it’s difficult to assess the legitimacy of users and transactions.
Concealing U.S. User Base
KuCoin is accused of intentionally hiding the significant number of U.S. users trading on their platform. This raises concerns about their commitment to complying with regulations specific to the U.S. market.
Facilitating Suspicious Funds
The indictment alleges KuCoin facilitated the laundering of billions of dollars in suspicious funds. It suggests the platform might be vulnerable to exploitation for illegal activities.
Was KuCoin Hacked?
KuCoin, a cryptocurrency exchange based in Singapore, was hacked in September 2020, resulting in the theft of approximately $281 million worth of cryptocurrencies, including Bitcoin, Ethereum, and others.
The hackers exploited a vulnerability in KuCoin’s security system, gaining access to the exchange’s hot wallets (wallets connected to the internet). They then transferred the stolen funds to various cryptocurrency wallets.
KuCoin responded to the incident by:
- To prevent further losses, the exchange temporarily halted all deposit and withdrawal activities.
- KuCoin moved the remaining funds from the compromised hot wallets to new, secure wallets.
- The exchange worked with law enforcement agencies to identify the hackers and recover the stolen funds.
- KuCoin pledged to reimburse affected investors for their losses using funds from its insurance fund.
Although KuCoin has recovered a portion of the stolen funds, the incident is a reminder that even major exchanges are not immune to cyberattacks.
Common Scams and Cyber Threats that Could Put Your KuCoin Account at Risk
Using an unsafe cryptocurrency exchange can lead to various risks, including:
- Hacking and Theft
Unsafe exchanges may have poor security measures, making them vulnerable to hackers who could steal your cryptocurrency.
- Scams and Fraud
Some exchanges may engage in fraudulent activities, such as manipulating prices or disappearing with your funds.
- Lack of Regulation
Many cryptocurrency exchanges operate in unregulated markets, leaving you with little recourse if something goes wrong. The same goes with KuCoin as reported by some investors.
- Loss of Funds
If an exchange goes bankrupt or is shut down, you may lose access to your funds. The KuCoin hack made many investors lose their funds.
- Difficulty in Withdrawing Funds
Some exchanges may make it difficult or impossible to withdraw your funds, especially if they are experiencing financial difficulties.
- Market Manipulation
Exchanges may be more susceptible to market manipulation, which can lead to significant losses for you.
- Lack of Customer Support
People have reported poor customer support, making it difficult to resolve issues or get help from KuCoin.
How to Secure Your KuCoin Account
Here are some tips on how to secure your KuCoin account:
1. Create a Strong Password
- Use a combination of upper and lowercase letters, numbers, and symbols.
- Make sure your password is at least 12 characters long.
- Avoid using personal information like your date of birth as your password.
- Don’t use the same password for multiple accounts.
2. Enable Two-Factor Authentication (2FA)
- 2FA adds an extra layer of security to your account by requiring a second form of verification in addition to your password.
- KuCoin supports several 2FA methods, including Google Authenticator, SMS, and email.
- It is highly recommended to enable 2FA for your KuCoin account.
3. Be Careful with Phishing Attacks
- Phishing attacks are designed to trick you into revealing your personal information, such as your password or credit card number.
- Be wary of emails and messages that claim to be from KuCoin.
- Never click on links or download attachments from suspicious emails.
- Always type the KuCoin website address directly into your browser.
4. Use a Secure Device
- Make sure your device is protected by antivirus software and a firewall.
- Keep your device’s operating system and software up to date.
- Avoid using public WiFi networks to access your KuCoin account.
5. Be Aware of Suspicious Activity
- Monitor your KuCoin account for any unusual activity, such as unauthorized withdrawals or login attempts.
- If you notice anything suspicious, contact KuCoin customer support immediately.
6. Use a Hardware Security Key
- A hardware security key is a physical device that adds an extra layer of security to your account.
- KuCoin supports hardware security keys, such as YubiKey and Google Titan Security Key.
7. Enable Email Notifications
- Enable email notifications for important account activity, such as login attempts and withdrawals.
- This will help you stay informed about what is happening with your account.
8. Be Careful with Third-Party Apps
- Only use trusted third-party apps to access your KuCoin account.
- Be sure to research any third-party app before using it.
9. Use a Separate Email Address for Your KuCoin Account
- This will help protect your primary email address from phishing attacks.
10. Withdraw Funds Regularly
- Don’t leave large amounts of cryptocurrency on your KuCoin account for extended periods.
- Withdraw funds regularly to a secure hardware wallet.
What to do If Your KuCoin Account is Hacked?
If your KuCoin account has been hacked, here are the steps you should take:
- Change your password as soon as you can.
- Contact KuCoin support and share your concerns with them.
- Secure all your devices on which you are trading cryptocurrencies.
- Enable email notifications to know about any breaches.
- Consider using a hardware security key.
- File a Police report as your last resort.
How to Access KuCoin Safely in the US
Due to regulatory restrictions, KuCoin is not fully accessible to US residents. However, using a VPN can help you bypass these restrictions and access the platform. Here’s how:
- Subscribe to a VPN service.
- Download and install the app for your device.
- Connect to the country server where KuCoin is available to trade.
- Enjoy your crypto transactions safely!
Frequently Asked Questions
Yes, KuCoin is facing legal troubles in the US. The US Department of Justice has charged its founders with violating anti-money laundering laws. This has led to concerns among users about the platform’s future and the safety of their funds.
No, KuCoin and Coinbase are not the same. They are both different cryptocurrency exchanges and have various features, signing fees, and target audiences.
Given the current situation, it’s advisable to limit the amount of funds you keep on KuCoin. Consider withdrawing a significant portion of your holdings to a more secure wallet.
Binance, while not without its controversies, is generally considered a more established and regulated exchange compared to KuCoin. It is essential to conduct thorough research and assess the risks associated with any cryptocurrency exchange before making a decision.
Kucoin is Safe But Not Without Criticism!
While Kucoin has a large user base and uses multiple security features like cold storage and multi-factor authentication, it’s not without its criticisms. Overall, Kucoin appears to be a legitimate exchange, but potential drawbacks like account freezing and limited customer support exist. It’s important to be aware of these issues before you make any investment.