KuCoin’s KYC Controversy: Exchange Denies Claims of Reserve Collapse

By: crypto economy|2025/05/07 00:00:01

TL;DRKuCoin denies that its mandatory KYC implementation caused a 77.6% drop in its Bitcoin reserves, insisting that the reported data is incorrect. Despite massive withdrawals, the company maintains a BTC reserve ratio of 106%. KuCoin argues that the measure aims to comply with global AML standards and strengthen user trust, rather than undermine it.Since mid-2023, KuCoin has faced heavy criticism after announcing its mandatory Know Your Customer (KYC) policy. According to Onchain School’s analysis, its Bitcoin reserves dropped from 18,300 BTC to just 4,100 BTC between June 2023, marking a 77.6% decrease. However, KuCoin quickly responded, stating that these figures are “highly misleading” and do not reflect its actual holdings, which currently include approximately 9,751 BTC in user assets and 10,306 BTC in its own wallets. The company assures that it maintains robust financial health, with a reserve ratio of 106%, which offers additional confidence to investors and long-term partners.Privacy-Conscious Users And Regulatory ShiftsThe controversy has highlighted how sensitive crypto users are to new regulatory changes. Onchain School attributes the massive Bitcoin outflows to concerns over privacy and the fear that KYC requirements undermine the decentralized nature of cryptocurrencies. However, crypto experts argue that such regulation is actually positive for the ecosystem, as it attracts institutional investors, boosts market legitimacy, and protects users from illicit activities. Moreover, some analysts believe the withdrawals could be temporary and that many users may return once they see the exchange’s financial strength confirmed, especially as markets stabilize.Global Compliance And The Future Of The Crypto EcosystemKuCoin implemented these measures to align with global anti-money laundering (AML) standards, especially after facing legal pressure in the United States, where it agreed to pay a $297 million fine and temporarily exit the U.S. market. Despite the criticism, the broader crypto industry acknowledges that steps toward regulatory compliance are necessary to survive in an increasingly regulated environment. In fact, exchanges like Binance and Coinbase already apply KYC requirements and still maintain a strong user base. These examples show that compliance does not necessarily mean the loss of competitive advantage or community trust.Although the implementation of KYC may have triggered a temporary outflow of funds at KuCoin, from a broader perspective it can be seen as an inevitable step toward the sector’s maturity. Transparency, legal compliance, and long-term trust are key for cryptocurrencies to reach their full potential in the global economy.

On March 4, 2026, DDC Enterprise Limited (NYSE American: DDC) today announced preliminary, unaudited full-year financial performance for the year ended December 31, 2025. The company expects to achieve record revenue and record positive adjusted EBITDA, primarily driven by continued growth in its core consumer food business and overall margin improvement. The final audited financial report is expected to be released in mid-April 2026.

2025 Full-Year Financial Highlights

Revenue: Expected to be between $39 million and $41 million, reaching a new company high.

Organic Growth: Excluding the impact of the company's strategic contraction of its U.S. operations, core revenue is expected to grow 11% to 17% year over year.

Gross Profit Margin: Expected to be between 28% and 30%, reflecting continued operational efficiency improvements.

Adjusted EBITDA: The company expects to achieve a positive full-year result in 2025, a significant improvement from a $3.5 million loss in 2024, mainly due to rigorous cost controls and a higher-margin sales mix.

Core Consumer Food Business Performance

In 2025, DDC's core consumer food business maintained strong operational performance.

The company also disclosed Core Consumer Food Business Adjusted EBITDA, a metric that further excludes costs related to its Bitcoin reserve strategy and non-cash fair value adjustments related to its Bitcoin holdings from adjusted EBITDA to more accurately reflect the core business performance.

In 2025, Core Consumer Food Business Adjusted EBITDA is expected to be between $5.5 million and $6 million.

Bitcoin Reserve Update

In the first half of 2025, DDC initiated a long-term Bitcoin accumulation strategy, holding Bitcoin as its primary reserve asset.

As of December 31, 2025: The company holds 1,183 BTC.

As of February 28, 2026: Holdings increased to 2,118 BTC

Today's additional purchase of 65 BTC brings the company's total holdings to 2,183 BTC

DDC Founder, Chairman, and CEO Norma Chu stated, "We are proud to have closed 2025 with record revenue and positive adjusted EBITDA, demonstrating the steady growth of the company's consumer food business and the ongoing improvement in profitability. We are building a disciplined, growth-oriented food platform and strategically allocating capital to Bitcoin assets with a long-term view, aligning with our core beliefs. We believe that this dual-track model of 'Steady Consumer Business + Strategic Bitcoin Reserve' will help DDC create lasting long-term value for shareholders."

Adjusted EBITDA Definition
For the full year 2025, the company defines "Adjusted EBITDA" (a non-GAAP financial measure) as: Net income / (loss) excluding the following items:· Interest expense· Taxes· Foreign exchange gains/losses· Long-lived asset impairment· Depreciation and amortization· Non-cash fair value changes related to financial instruments (including Bitcoin holdings)· Stock-based compensation

About DDC Enterprise Limited

DDC Enterprise Limited (NYSE: DDC) is actively implementing its corporate Bitcoin Treasury strategy while continuing to strengthen its position as a leading global Asian food platform.

The company has established Bitcoin as a core reserve asset and is executing a prudent, long-oriented accumulation strategy. While expanding its portfolio of food brands, DDC is gradually becoming one of the public company pioneers in integrating Bitcoin into its corporate financial architecture.

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DDC Enterprise Limited Announces 2025 Unaudited Preliminary Financial Performance: Record Revenue Achieved, Bitcoin Treasury Grows to 2183 Coins