KuCoin Awaits Legal Notice to Freeze Assets of Crypto Rug Pull Scammer: Details

KuCoin has identified one of its users as a serial scammer, looting unaware crypto investors of their finances. The Seychelles-based crypto exchange has decided to not freeze the assets of this user, whose name remains undisclosed, unless a law enforcement agency sends over a legal notice instructing the exchange to do so. In recent years, legal agencies have become very strict around curbing the incidents of scams and hacks in the crypto sector. It could be just a matter of time before KuCoin gets a direction from the Seychelles authority on the matter.

The situation came to light after James Edwards, a Web3 community member, recognised a shady wallet address that had been launching two to five scam coins every day for the last two years. This wallet address was found to be linked to KuCoin.

Modelled after the popular Dogecoin and Shiba Inu, the meme-coins released by this scammer were to trick people to invest in them.

Later, in a typical rug pull style, the scammer would abandon the tokens and disappear with whatever these tokens pulled as investments from the victims.

In its justification for delaying the blocking of assets linked to this scammer, KuCoin has said it will follow the laws of Seychelles.

“When the reporting party has provided relevant legal documents, procedures, or reporting records, we will assist and cooperate with law enforcement agencies to take temporary risk control measures in accordance with complaints and reports, user agreements and Seychelles laws,” a CoinTelegraph report quoted KuCoin as saying in an email interaction.

In a recent report, CoinGecko named KuCoin as the third most trustworthy exchange in the world after Coinbase and ByBit.

This could be the reason why KuCoin has been becoming a hotspot for crypto scammers for a while now.

Some users of the KuCoin exchange collectively lost over $22,000 (roughly Rs. 18 lakh) after the Twitter account of the crypto exchange was briefly hacked. Hackers managed to gain control over KuCoin's Twitter handle for about 45 minutes on April 24.