KuCoin Denies Layoffs, Says Cuts Are Result of 'Biannual Appraisal'

Cryptocurrency exchange KuCoin dismissed claims on Tuesday that the Seychelles-based firm has significant layoffs planned, describing any adjustments to its headcount as a matter of housekeeping.

“We did not initiate any alleged layoff plan,” a spokesperson for KuCoin told Decrypt. “As part of a normal process of organization development, we keep doing biannual appraisals to keep up with the competitive market.”

KuCoin did not deny it’s in the process of pink-slipping some staff, but the exchange’s CEO Johnny Lyu took issue with describing a reevaluation of its headcount as layoffs.

Colin Wu of Wu Blockchain reported earlier on Twitter that KuCoin plans to cut 30% of its nearly 1,000 employees. Claiming the measure was confirmed by several KuCoin employees, he said the alleged cuts were due to a strict know-your-customer (KYC) policy that cut into the firm’s profits.

Wu said the KYC policy was instituted after the exchange was sued by the U.S.. In March, New York Attorney General Letitia James accused KuCoin of violating securities and commodities laws in a lawsuit.

Lyu pushed back against the firm’s allegedly embattled state on Twitter, describing chatter as “some rumors floating around.”

“To stay on top, we regularly evaluate our org structure based on employee performance and company development,” he said. “So it is not layoffs, and it is all about making the organization more dynamic and competitive.”

Lyu pointed to a report firm KuCoin issued earlier this month as evidence the exchange continues to grow, which mentioned the exchange added 300 new employees in the first half of this year. The report also said KuCoin is changing its KYC practices.

“KuCoin is also upgrading KYC authentication systems to prioritize user asset security, comply with global compliance requirements, and create a safer trading environment,” the report said.

KuCoin ranks 11th among other platforms by “trust score,” according to CoinGecko. It notched $327 million in trading volume over the past day.

Recent changes to KuCoin’s KYC policy—which took effect on July 15—required newly registered users to complete its KYC process to use the exchange's products and services.

Registered users who had not completed KuCoin’s KYC process by the deadline saw restrictions placed on their accounts, limiting them to certain activities like spot trading and preventing them from using the firm’s deposit services. The updated KYC policy did not require registered users to complete KuCoin’s KYC process in order to withdraw funds.

A day after the exchange announced an update to its KYC policy, trading volume on KuCoin spiked to $6.8 billion from nearly $500 million the day before, according to CoinGecko. The only other time KuCoin’s trading volume eclipsed $1 billion in the past month was the day before its KYC policy change took effect.

On Twitter, Lyu said the firm continues to keep pace with changes in the digital assets industry, and its dedication to users hasn’t wavered.

“KuCoin is operating smoothly,” he said. “We'll keep investing in our core businesses and providing our users with the top-notch experience we promised.”