Crypto Exchange KuCoin Denies Extorting $180,000 in Volume-Boosting Fees From Crypto Projects
Singapore-based cryptocurrency exchange KuCoin denied a rumor that it asked crypto projects with low transaction volume to pay up to $180,000 in volume-boosting fees, but saying that it will offer projects at risk of being listed some marketing advice and recommend market makers to them when needed, according to the Chinese financial media Caijing.
In a recent report from The Block, KuCoin which has more than 5 million registered users has reportedly issued an ultimatum to at least four crypto projects that fell into the bottom 18 percent in daily trades, threatening them with delisting unless they are able to pay about $180,000 in volume-boosting fees. These four projects are Jibrel, Encrypgen, Unikrn and Publica.
When cryptos fall into the bottom 18% of tokens in daily trades on KuCoin, they will be subjected to “Special Treatment rules“. Sources say the only way to stay on the exchange is to pump trading volume with “any means necessary.”
Jibrel’s COO Talal Tabbaa said,
“We received an email saying “you have the ability to improve your volume or you’ll be delisted. Then they recommended market-making firms that would help us reach the minimum daily volumes they set for projects. I was honestly shocked at the requests they were making.”
Tabbaa added that the exchange referred him to two market makers who were allegedly affiliated with KuCoin and did “ listing and marketing” for them. The project eventually turned down the proposal, citing the desire to fuel “natural demand.”
However, a senior marketing manager from KuCoin told Caijing that ,
“No market maker is affiliated with the exchange. We have launched an internal investigation into the event and did not find any KuCoin employee had received $180,000 in volume-boosting fees,” adding that KuCoin did not force any project to make a market making plan.
According to a source closed to a market maker, the email that was forwarded to Tabbaa was sent by an ex-employer of KuCoin who had resigned in August 2018. During his tenure, he was responsible for crypto listing, ICO marketing and crypto liquidity. The person has no ties to KuCoin now, excluding he holds some KSC tokens, an ERC-20 token issued by the exchange.
Encypgen CEO David Koepsell received a similar email. He said KuCoin pitched him into an “advanced marketing package” which cost $90,000 and could be paid in bitcoin to boost their trading volume. After he refused to pay, KuCoin kicked its token out of the platform.
As for the authenticity of the email that was sent to Koepsell, KuCoin indicated it could come from a fraudulent address because The Block did not provide a full page of screenshot.The exchange added that it would “definitely take actions to deal with behaviors that violate our company policy,” if the emails came from its staff.
Two other projects, Unikrn and Publica, also refused to pay the “ volume-boosting fees”.