3 - 5 minute read
Crypto exchange KuCoin has confirmed that a user on its platform is behind the launch of thousands of memecoin scams. On April 26th, a Twitter user identified a wallet address that had launched up to five memecoins daily for two years. The community member noted that the wallet addresses were “owned and controlled” by KuCoin. The exchange has confirmed that the wallet address belongs to one of its users. However, it will not freeze the account’s assets without receiving official notice from law enforcement. Blockchain explorer Etherscan has already marked the said address as a fake phishing wallet.
According to Johnny Lyu, KuCoin’s spokesperson, the exchange will cooperate with law enforcement agencies when the reporting party has provided relevant legal documents, procedures, or reporting records. The exchange will take temporary risk control measures in accordance with complaints and reports, user agreements, and Seychelles laws. Furthermore, the exchange urged community members to report any suspicious behavior to the police and submit relevant materials to their team. They added that they would be pleased to cooperate after receiving the required documents.
KuCoin has been facing various challenges in the past week. On April 24th, the platform’s official Twitter account was compromised, and a fake activity was posted, resulting in some of its followers losing their assets. The exchange worked with Twitter to recover the social media account and promised to reimburse the victims affected by the hack.
.@CoinGurruu the wallet that you claim has launched 2-5 memecoin scams per day for the past two years is owned and controlled by @kucoincom. @etherscan has already marked this address as "Fake_Phishing179336".
— James Edwards (@librehash) April 27, 2023
Comments @lyu_johnny? https://t.co/8sy07KujUa pic.twitter.com/gziza5mVNW
The incident highlights the importance of safeguarding user accounts and the need for exchanges to work closely with law enforcement agencies to combat fraudulent activities. It also underlines the risks associated with investing in memecoins, which are often not backed by any tangible assets and can be easily manipulated. Investors should exercise caution and undertake comprehensive research before investing in any cryptocurrency.
“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.”
The Bottom Line
KuCoin’s confirmation that one of their users was behind the launch of thousands of memecoin scams highlights the importance of safeguarding user accounts and the need for exchanges to work closely with law enforcement agencies to combat fraudulent activities. Investors should exercise caution and undertake comprehensive research before investing in any cryptocurrency.
