The announcement follows the exchange and two of its founders being charged by the DOJ.
According to Lyu’s post, the airdrop rules would be announced in three days.
In a statement published on the exchange’s blog on March 27, crypto exchange KuCoin’s CEO Johnny Lyu announced that the exchange would be holding an airdrop of Bitcoin and its native KuCoin (KCS) token valued at $10 million. The announcement follows two days after the exchange and two of its founders were charged by the U.S Justice Department (DOJ).
According to Lyu, the airdrop is similar to the exchange paying back its investors who lost money during the Confido rug pull. Moreover, according to Lyu’s post, the airdrop rules would be announced in three days. It is possible that the high volume, brought on by consumers who were skeptical of the exchange, is to blame for the current delays in withdrawals. Thus, the airdrop is a way to thank the people who stuck with the exchange during the tough times.
Ongoing Legal Scrutiny
It is notable that the airdrop occurred at this time since KuCoin was the target of a slew of legal activities only the day before. The two founders were indicted for failing to have an Anti-Money Laundering program and for running an unregistered money-transmitting firm, in violation of the Bank Secrecy Act. The indictment was released by the Justice Department.
At the same time, the CFTC began a civil action against the exchange for alleged breaches of the CFTC rules and the Commodity Exchange Act. Following the filing of the accusations and a 12% drop in KCS within 24 hours, KuCoin moved quickly to reassure users that their investments were secure. There are hazards associated with airdrops, and regulatory action is one of them.