Is Kucoin safe?

Kucoin is a centralised cryptocurrency exchange which was launched in September 2017 and offers a wide range of cryptocurrencies to trade. Currently, the platform has over 700 digital assets and provides spot and margin trading, as well as P2P fiat trading, futures trading, staking and lending.

The platform currently hosts over 30 million users and is the 10th-largest cryptocurrency trading platform according to CoinMarketCap. It operates in over 200 countries, including the US, Europe, and South America.

In this article, we will examine the features of Kucoin and whether the platform is safe or not. In the meantime, make sure to register with LiquidityFinder to stay updated with our Insights and News.

Overview of Kucoin

Like many centralised exchanges (CEXs) and decentralised exchanges (DEXs), Kucoin was created in 2017, a boom in crypto exchanges. Kucoin was founded by Michael Gan and Eric Don.

Kucoin aimed, like many other exchanges, to provide users access to a range of cryptocurrencies on a platform that was intuitive and easy to use. Kucoin saw huge growth in the trading community and gained popularity in cryptocurrency circles on the internet. 

Kucoin offers a wide variety of crypto coins and stablecoins and continuously adds to its offering. The company is based in the Seychelles, as is Bitget. 

Key Features Of Kucoin

Kucoin is not directly regulated, so in the UK, it is not regulated by the FCA. However, the activities of cryptocurrency exchanges are still overseen by the FCA, such as compliance with certain advertising practices.

Here are all the main services that Kucoin currently offers:

KuCoin Token (KCS)

Kucoin has a native token known simply as Kucoin Token (KCS). Like most tokens, this operates as a cryptocurrency in itself, but is generally rewarded for users staking their cryptocurrency and joining mining pools. This token can then be traded or held for voting decisions.

Spot trading

Spot trading allows users to buy and sell a huge range of cryptocurrencies on the market. The platform has a user-friendly interface but also has tools that are of interest to more experienced traders.

P2P, OTC & Cross-Exchange Trading

Kucoin offers peer-to-peer (P2P) and over-the-counter (OTC) trading which means that users don’t necessarily have to go through the traditional spot market to make a trade. Kucoin P2P is a safe method to transfer funds for many users.

The platform also offers cross-exchange trading, which means that users can make use of different exchanges and liquidity outside of Kucoin if they choose.

Futures & margin trading

Futures and margin trading allows traders to maximise their profits even further, albeit to also take on more risk. More experienced traders can benefit from these tools through sophisticated trading strategies.

Staking

Users of Kucoin can earn from staking their assets on the platform and earn passive income. This requires them to lock in a portion of their portfolio and receive a return from the staked assets, which for some riskier pairs can be a high percentage return.

Kucoin Spotlight

A unique feature of Kucoin is the Kucoin Spotlight, which offers insight into new cryptocurrency projects, as well as a launchpad for them to gain their first investors. It is a way to get users involved with initial exchange offers (IEO) for new projects, and also provide new projects an incentive to get involved with Kucoin’s network.

Kucoin Trading Bot

Users of Kucoin can create trading bots to do their trading for them, with 15 million trading bots created to date. 

The Kucoin Trading bot is free to use, and allows traders to automate crypto trading, either through their own strategies or by choosing a template bot, such as a Dollar-Cost Averaging strategy.

This is ideal for the cryptocurrency market which can change in an instant – which for many is impossible to keep up with. Bots can be created to identify certain triggers to then execute trades.

Is Kucoin safe?

Yes, Kucoin is safe. It is a legitimate cryptocurrency exchange which has been around since 2017 and implemented several security features that ensures its users are protected. 

Kucoin lists all its safety features on its website. Here are all the security measures that Kucoin implements to make sure it is a safe platform:

Multi-Layer User Authentication

Users are encouraged to enable 2FA for their accounts. They are also required to verify many of their account activities.

Proof of Reserves (PoR)

Kucoin uses Proof of Reserves (PoR) to verify that the assets held by the company are legitimate and not inflated or being used elsewhere. This ensures that during a crash a liquidity crisis can be avoided.

Bug Bounty Program

Kucoin has a ‘Bug Bounty’ program which means that users are rewarded for identifying bugs and vulnerabilities. This way, users are incentivised to contribute to the security of the platform.

The highest reward (for an extreme bug identified) is $1m.

Cold storage 

The majority of the funds held with Kucoin are in cold wallets, which are separate to the internet and Kucoin. A small portion is kept in hot wallets to assist with operational liquidity.

Kucoin has also rolled out its own separate wallet, now known as Halo Wallet (previously known as KuCoin Wallet). This is a secure option for those looking for a cold wallet.

Criticisms of Kucoin

Despite the safety measures that Kucoin implements, there have been several complaints about the security of the platform.

Some users have reported their accounts being frozen during ‘volatile periods’ (or often arbitrarily) which means in some cases they end up missing out on large trading profits.

Furthermore, in some cases, cryptocurrency stolen from other places has been sold on Kucoin, effectively ‘cleaning’ the money.

Customer service responses have also been criticised, and there is a significant lack of trust among users for being compensated for losses.

Conclusion

Kucoin remains a trusted platform for over 30 million users and new cryptocurrency assets are being added all the time. As the cryptocurrency industry is relatively new, with such extreme volumes of trading and profits, there are still many inefficiencies that need to be ironed out. 

However, Kucoin is a safe platform and can be trusted to trade cryptocurrency. As stated on Kucoin’s website, 1 in 4 cryptocurrency traders are currently using Kucoin to trade.

If you are looking for a different type of crypto exchange, then you can also try Uniswap or Sushi, which operate as decentralised exchanges (DEXs), where there is no central authority in control of the cryptocurrency.

At LiquidityFinder, we host a wide range of liquidity providers including crypto exchange providers which can help with your crypto liquidity.

It takes just a few minutes to register with LiquidityFinder, and once you do, you’ll have immediate access to our exclusive network of liquidity providers, as well as gain access to tools such as our Match Matrix and our multi-provider request form. 

Stay up-to-date with our Insights too, where we update our audience on everything they need to know about liquidity, crypto and more.

Author

Caleb is a financial copywriter with a specialisation in fintech and forex. Former copywriter at Barclays and Paysafe. Contributing writer for LiquidityFinder. You can message Caleb here.