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KuCoin confirms an exchange user is behind alleged daily rug pulls

A community member identified a wallet address that allegedly launched several memecoin rug pulls daily for almost two years.

Crypto exchange KuCoin confirmed that the address allegedly responsible for launching thousands of memecoin scams belongs to one of its users. However, the exchange will not freeze the user’s assets without any official notice from law enforcement.

On April 26, a Twitter user identified a wallet address that launched two to five memecoins daily for two years. Another community member pointed out that the wallet addresses were “owned and controlled” by KuCoin. At the moment, blockchain explorer Etherscan has already marked the said address as a fake phishing wallet.

.@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".

Comments @lyu_johnny? https://t.co/8sy07KujUa pic.twitter.com/gziza5mVNW
— James Edwards (@librehash) April 27, 2023

In a statement sent to Cointelegraph, the crypto exchange confirmed that the wallet address belongs to one of its users. According to KuCoin’s Johnny Lyu, while the address belongs to one of the platform’s users, it will not freeze the account until it receives a notice from the relevant authorities. Lyu explained:

“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.”

In addition, the exchange told Cointelegraph that if community members encounter any suspicious behavior, they must report it to the police and submit the relevant materials to its team. Lyu added that KuCoin would be pleased to cooperate after receiving the required documents.

The KuCoin exchange has faced challenges in the past week. On April 24, the platform’s official Twitter account was compromised and posted a fake activity, resulting in some of its followers losing their assets. After identifying the breach, the exchange worked with Twitter to recover the social media account and promised to reimburse the victims affected by the hack.

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