In response to escalating regulatory pressure, cryptocurrency exchange KuCoin is updating its user asset management with new systems to enhance transparency.
Proof-of-Reserves System
KuCoin has introduced a proof-of-reserves system that allows users to verify their assets are part of the exchange's total reserves. This system operates through Merkle Tree verification, enabling users to confirm sufficient resources against their deposits without revealing any personal account information.
Custody Services
For institutional clients, KuCoin has launched custody services in partnership with BitGo, a firm licensed by the Monetary Authority of Singapore. This arrangement ensures client assets are kept separate from the exchange’s own funds and includes insurance coverage up to $250 million in the event of theft or system failure.
Pursuit of International Regulation
KuCoin is also seeking approval for a Markets in Crypto-Assets (MiCA) license in Europe. This license will soon be required for cryptocurrency operators in the European Union. This move is part of KuCoin's initiative focused on increasing transparency regarding user assets and preparing to meet global regulatory standards.
KuCoin's updates aim to provide users with greater visibility and control over their assets, reflecting a broader trend in the cryptocurrency industry where trust is expected to arise from verifiable systems.
