Is KuCoin Safe? Is it Legit or Scam?
Photo: KuCoin
When it comes to trading cryptocurrency online, you want to make sure you’re using a secure exchange. Security is of utmost importance on cryptocurrency exchanges because once your crypto is lost, there’s a very high chance that you’ve lost it forever.
Therefore, cryptocurrency exchanges should be regulated by well-recognized authorities and have user-level protection features, such as two-factor authentication. Before you start trading on KuCoin, you should know: is KuCoin safe? What makes the platform safe? You’ll find out below.
Is KuCoin Safe? How is KuCoin Protecting Your money?
When considering the safety of a cryptocurrency exchange, you need to note which financial institutions regulate it and the security features the platform has for its users. As for the former, KuCoin is not regulated by any financial institution, which is a red flag in the crypto world.
However, the platform has partnered with Onchain Custodian, a third-party company that is responsible for keeping KuCoin’s crypto assets secure. The partnership is also inclusive of Lockton insurance for any crypto-related crimes on the platform. More importantly, KuCoin has a Bug Bounty program, in which ethical hackers can report any shortcomings or weaknesses of KuCoin’s system.
Photo: Kucoin Bug Bounty Program
How is KuCoin Regulated by Governments?
A concerning thing about KuCoin is that it is not regulated by financial institutions in any country. People living in the US should be especially careful because KuCoin is not licensed by any financial authority in the country. For residents in the US, there are extra risks when using unregulated cryptocurrency exchanges.
If you use unregulated crypto exchanges in the US, your account is at risk of being frozen. In this case, you will lose access to your account and the assets in it. The US is taking these measures to prevent tax evasion and money laundering in the country.
Has KuCoin had Any Security Compromises?
In September 2020, KuCoin’s hot wallets were hacked by unknown hackers, leading to a compromise worth $281 million. The CEO of the cryptocurrency exchange reported that some hackers got private keys to the hot wallets of the exchange and transferred a significant amount of ETH and BTC to different wallets.
In a later statement, KuCoin said they recovered 84% of the cryptocurrency funds stolen in the September incident. The exchange also announced that they have substantial proof of the hackers responsible for this security compromise.
As for reimbursement, KuCoin and its insurer announced that they would recover all wallets affected by this incident. Nearly 153 types of ERC20 tokens were stolen by hackers, of which 80 million were NOIA tokens. In response to this incident, the NOIA network released a statement saying that all affected accounts will be given a 1:1 replacement for the assets lost.
Since this security compromise, KuCoin has increased the number of security features on the platform. Users can now set up security questions, trade passwords, and other security features.
Is KuCoin Safe (legit) In the US?
Is KuCoin safe in the US? US citizens must know that KuCoin is not licensed in the US. As a US citizen, you could use the platform without going through KYC verification. However, you’ll face restrictions on the amount you can access and leverage. You can only withdraw 2 BTC every day as a US citizen on the platform.
It’s best if you opt for a different cryptocurrency exchange because US laws are quite strict for individuals who use unregulated cryptocurrency exchanges. Here are the countries not supported by KuCoin:
Countries Not Supported
KuCoin Security Rules
KuCoin reports that the clients’ assets are stored in cold storage, which is relatively harder to hack. However, the platform hasn’t specified the percentage of assets that are offline. Surely, a notable amount of assets must be in hot wallets, allowing users to make trades and withdrawals on the platform. KuCoin also has extra security features for users.
Two-Factor Authentication: With this feature, you have to enter your account using your password along with another piece of identity information.
Security Question: You can also set up a security question on KuCoin to ensure safer logins.
Anti-Phishing Safety Phrase: An anti-phishing safety phrase is a randomly generated set of characters that you create to help protect your online identity. You can use this safety phrase whenever you are asked to provide personal information, such as for making a trade or logging into your account.
Safety Phrase: Like security questions, you can also keep a login safety phrase to maintain additional security.
Trading Password: Users can also set up passwords for their trades. You’ll have to enter the password for every trade you make.
Phone Verification: You can set this up for your logins. KuCoin will verify that it’s you trying to log in by sending you a notification and OTP on your phone.
Email Notifications: Once you make a trade on the platform, KuCoin sends you an email notification to alert you that a transaction has been made on your account.
Restrict Login IP: You can activate this feature on the platform to keep your account secure from hacks. Once enabled, the feature logs you out of your account if it is accessed through a different IP address than the one you used to make the account.
Restrict login IP
KuCoin also recommends you do the following to keep your account secure:
Change your account password regularly. Make sure you don’t use a password that you use anywhere else.
Upgrade your two-factor authentication to dynamic code, such as Google Authenticator.
Change the password of your email account regularly.
If you use the same system to access your KuCoin account, you’ll be using the same IP address each time. You should activate restricted login IP to keep your account safe.
KuCoin Pros and Cons
Is KuCoin legit? It surely is. But before you make a KuCoin wallet, you should know the pros and cons of the platform. It will help you determine if KuCoin is the right option for your preferred trades.
👍 KuCoin Pros
• Offers a wide range of cryptocurrencies
• Charges low commission and trading fees
• Detailed guides and useful resources for beginners
• Allows users to earn interest on their crypto holdings
• Has advanced trading features for veteran traders
• Large trading volumes
👎 KuCoin Cons
Is KuCoin Good For Beginners?
Although KuCoin has detailed guides for beginners, it may not be the best platform for novice traders due to the overwhelmingly large number of features and tools. Beginners should use a less advanced crypto exchange as that will be simpler to navigate. Alternatively, beginners can use the Lite version of KuCoin, which is more tailored towards newbies.
Summary
On the whole, KuCoin is a relatively safe crypto exchange platform. But you can’t ignore the fact that it is not regulated by a financial institution, not licensed to operate in the US, and has had a security compromise in the past. All these things raise concerns about the security of the platform.
But you can use security features of the platform, such as two-factor authentication and security questions, to secure your KuCoin wallet. As for US traders, it’s better to use a different platform that has been licensed to operate in the US since it will protect you from any legal trouble.
FAQs
Is It Safe to Keep Crypto in KuCoin?
Yes, it’s safe to keep cryptocurrency in KuCoin, especially if you use the platform’s security features. Moreover, KuCoin keeps most of its assets in cold storage, which further protects them against hacking.
Can You Use KuCoin Safely in the US?
In the US, there are strict regulations surrounding cryptocurrency exchanges. KuCoin is not licensed to operate in the US, which means US citizens will not be able to go through KYC verification. US citizens can still make their accounts on the platform, but they’ll have a restriction of 2 BTC withdrawals only per day. Plus, it’s not exactly safe to trade on a platform that’s not licensed to operate in your country.
Is KuCoin Legit?
Yes, KuCoin is legit. But it’s important to note that no financial authorities regulate the platform. Moreover, the crypto exchange has received many negative reviews on third-party sites, such as TrustPilot. You should be careful when trading on the platform.
Has KuCoin Ever Been Hacked?
Yes, KuCoin was hacked in September 2020. However, the crypto exchange reimbursed most of the wallets that were affected by the incident and implemented more security features in response.
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Team that worked on the article
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).