Users on social media have been commenting on the current APRs offered by KuCoin on multiple cryptocurrencies, including Ethereum (ETH), Bitcoin (BTC), and Tether (USDT). However, after what happened with other crypto exchanges and Terra (LUNA), users are worried about how these APRs can be offered to users around the world.
KuCoin Offers Large APRs to Users
KuCoin users are now able to deposit their digital currencies and receive large rewards on their holdings. However, these rewards are raising concerns among the crypto community as they seem too good to be true.
Some of these APRs were the following:
Ethereum (ETH): 231.89%
Binance Coin (BNB): 8.25%
Polygon (MATIC): 12.31%
Bitcoin (BTC): 299.49%
Tether (USDT): 200.25%
These APRs seem to be quite high, especially because they can be even higher than the ones offered during the bull market of 2021 where decentralized finance (DeFi) projects were the hot topic. Moreover, users started to discuss the liquidity issues that have been behind the crypto market in recent months. How is KuCoin able to offer these APRs?
Dan Gambardello, the founder of CryptoCapitalVenture, wrote the following on Twitter:
“Can someone tell me why KuCoin has some ridiculous APRs right now? Over 200%!. With all the liquidity problems in crypto lately, is this really the best time for this?”
Let’s not forget that the higher the rates offered by crypto exchanges, the higher the risk as well. There is a large risk for users to leave funds on exchanges, and KuCoin might be trying to retain some of the users on its platform. That means that there could be an issue with liquidity at this crypto exchange.
Despite that, these are only suppositions on social media networks. But the community has a reason to believe that this could happen. Especially when just a few weeks ago, one of the largest exchanges in the crypto industry imploded, pushing digital assets lower, including Bitcoin.
On my KuCoin tweet, showing Tether getting now a 300% APY interest rate, a lot of people have commented that it's only on a "limited" amount or that the fine print reduces it.
That's not the point.
— Bitfinex'ed 🔥🐧 Κασσάνδρα 🏺 (@Bitfinexed) November 29, 2022
Multiple users have reported the situation that they are currently experiencing with KuCoin with extremely high APRs. Twitter is currently talking about it and users are worried about what could happen if these APRs continue in the coming days or even weeks. However, the largest fear is related to KuCoin imploding as FTX as users continue to withdraw funds from this platform.
KuCoin users are worried about the exchange running out of liquidity and increasing APRs in order to keep users at the exchange. Other crypto trading platforms are also providing proof of funds in order to address possible concerns from investors and traders.
It is always important to take into account that the best way to hold digital currencies is with self-custody. That means that users should hold their digital assets on hardware wallets to which they hold the private keys. Alternatively, the option is to use a software wallet with full control of the private keys in order to avoid possible crypto exchange runs or getting your account blocked as it happened with other crypto trading platforms in the past.
