KuCoin Review (2021)

May 6, 2021

This review is part of a crypto exchange review series. Our last five reviews evaluated Kraken, Bittrex, Binance, Huobi, and Coinbase Pro. We are publishing reviews for each of the top exchanges, so don’t miss any of these updates by joining our Telegram group.

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KuCoin has long been in the shadow of Binance, its better-known competitor. If token price is any indicator, however, KuCoin ($KCS) has been on the rise in both the eyes of investors and those of traders.

The KuCoin story is a curious one. Ask around and you’ll find that for many, KuCoin just suddenly appeared. No splashy market entrance, no glitzy press campaign — it simply opened its doors to traders, and that was that. Despite not entering the market with much fanfare, KuCoin did do one thing right from the very beginning — it offered tokens and trading pairs that couldn’t be found anywhere else.

When KuCoin came online in September 2017 — only a month after Binance’s debut — it hit the ground running at a very particular moment. The cryptocurrency market was still in the midst of a cool-off period after a parabolic spring campaign. ICOs were catching on in earnest and were helping to aggregate value in both BTC and ETH. Exchanges were still in their infancy — Coinbase, Bittrex, Poloniex, Kraken, and Bitfinex were the best known but had paltry altcoin offerings.

What happened next may have seemed like the obvious play, but no one until KuCoin had decided to do it — the KuCoin team put all those ingredients together and created what they dubbed “The People’s Exchange.” KuCoin knew that people were sick of having to gamble on shady exchanges like Liqui.io, EtherDelta, and others to buy obscure altcoins. They knew that if people had an option for buying those same altcoins on a legitimate exchange, then they wouldn’t hesitate to leave places like EtherDelta forever.

That’s exactly what happened — except the exodus away from low liquidity exchanges with bad customer service didn’t happen overnight, and it wasn’t only because of KuCoin. Several other exchanges formed around the same concept. Coss and Bibox debuted not long after KuCoin and went after the same market. Huobi expanded its offerings to try and grab more market share. Despite the market politics and turbulence, KuCoin came out strong and carved a place for itself by virtue of offering a no-nonsense user experience backed by an impressive array of tokens.

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Michael Gan, KuCoin’s founder, believes the exchange’s success is owing to its preference for listing “hidden gem” cryptocurrencies. While that is, without a doubt, a large component of the KuCoin success story, the other unforgettable move made by the team early on was to offer users a referral program. The referral program was, essentially, a profit-sharing program unlike any other that had come before it. Because of the unselfish incentives offered by the exchange, people became die-hard KuCoin evangelists, helping the exchange to accumulate new users at a blistering pace.

KuCoin quickly collected so many new users that they became inundated with site traffic and had to take measures to slow their own growth. Now, imagine that — being so successful that you consciously decide to hit the brakes on your own success.

Along the way, KuCoin has made changes to its referral program and, at one point, discontinued it altogether. Policy changes aside, the exchange has operated without service interruptions or hacks since debuting. The last point — that KuCoin hasn’t been hacked — is a major testament to the team’s dedication to keeping its users safe and sound.

So, is KuCoin the place to be if you want to collect a few hard to find tokens? Let’s get to the bottom of that question by taking an in-depth look at the exchange’s operations.

Opening an Account

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Signing up for a KuCoin account is easy — maybe even too easy. After heading over to KuCoin.com (always triple check that the address is correct before entering any of your information), look for the ‘Sign Up’ button found on the page’s upper right-hand side. Go ahead and click on through before being met with a prompt to enter an email address which will be pre-screened with a verification code.

After you clear the email code hurdle, you can finalize your account creation by entering a strong password.

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Once on the inside, you’ll be taken to your account overview dashboard which has become much better looking over the years. When KuCoin first opened shop, its UI was lacking when compared to heavy hitters like Coinbase and Binance. Nowadays, however, KuCoin’s user-friendliness has reached new levels. If you’ve used a cryptocurrency exchange in the past, then KuCoin’s dashboard should pose no challenges.

As always, we suggest that you maximize the security options on your account by starting with enabling 2FA security. To get set up, click on your profile avatar in the upper right-hand corner. Once there, you’ll see several options relating to security settings, KYC, and trading password. Max out your security settings and set a trading password. Once done, you’ll want to go through KYC so that you can recover your account if you get locked out one day.

Finally, you’ll need to fund your account. KuCoin does things a bit differently than other exchanges you’ve used. Whereas Binance, Coinbase, Bittrex, and others all use one main account which takes deposits, sends withdrawals, and trades directly, KuCoin separates your account into a ‘main account’ and a ‘trading account.’ To trade, you’ll need to:

  1. Fund your main account by purchasing crypto with a credit card or sending crypto from another source to your KuCoin wallet.
  2. Send funds from your main account to your trading account.
  3. Trade — then, when ready to withdraw, do the process in reverse.

While the separation of accounts may seem redundant, we think it's a brilliantly safe design. APIs only have access to your trading account — so, if you want to err on the side of safety and are using third-party APIs, you can keep the lion’s share of your wealth safe in your main account.

Features and Services

Using KuCoin for the first time is a bit like traveling from the USA to Australia. Everything seems almost the same — but once you look more closely, you begin to notice all the little differences. Coming from an exchange like Coinbase may make KuCoin seem a bit intimidating at first, but that’s mostly owing to its array of features that suit traders of different stripes.

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  • Tons of Trading Pairs — KuCoin’s main draw is the sheer amount of trading pairs on offer for tokens you won’t find at any other major exchange. In most cases, KuCoin opens a token’s path to the big leagues by debuting the project on its exchange before other exchanges, like Huobi and Binance, pick the token up as well. The beauty of KuCoin’s selection is that you don’t have to fish around on scammy exchanges to get ahold of typically illiquid tokens like J8T or newer projects like MTV.
  • Security — There’s plenty of ways for exchanges to impress, but the most crucial quality to possess is robust security. Although KuCoin has implemented a number of security checkpoints inside the UI, which make the exchange appear secure, they have been the subject of the latest high-profile hack. In an instant, $150M in cryptocurrency was stolen from the exchange on September 25, 2020. Hackers were able to access the KuCoin hot wallets which held a significant portion of their total assets. This faulty security design may lead to the exchange’s ultimate downfall.
  • 24/7 Support and Powerful Trading Engine — KuCoin’s support staff is available 24/7 via the exchange’s website and by email. Despite having a high volume of requests flooding in from the world over, KuCoin’s support staff does a noble job of promptly replying to support inquiries. Another way the exchange supports its users is by maintaining a powerful trading engine that can handle up to 2 million orders per second. Even under extreme duress and demand, the exchange’s operations keep on flowing without a noticeable slowdown.
  • Spotlight IEO Platform — Missing out on the IEO craze is a mistake that’s not worth making. As such, KuCoin was one of the first cryptocurrency exchanges to not only jump on the IEO bandwagon but to also innovate it with their Spotlight platform. That’s given KuCoin users a headstart on a fad that doesn’t seem to be fading any time soon. Both MultiVAC and Trias featured as early Spotlight IEOs, and despite their so-so market performance, the attention-grabbing headlines around IEOs have been great for KuCoin’s exchange growth and token value.
  • OTC Trading Desk — Much like IEO platforms, OTC trading desks have become the norm for cryptocurrency exchanges. Institutional interest in crypto has been heating up all year long, and with digital asset trading currently in full-swing, KuCoin’s OTC trading desk is more relevant than ever. OTC trading is, generally, for high-net worth and firm size accounts needing to settle trades away from the order book. KuCoin’s OTC desk is currently in its trial phase and is available for USDT and CNY pairs.
  • Margin Trading — KuCoin launched their margin trading services on October 31, 2019. This platform initially supported 12 different assets, which provided a way to trade with up to 10x leverage. In addition to the margin trading features, this also marks the opening of a lending platform for users who wish to lend their tokens to others for margin trading.
  • KuCloud - After the announcement that Binance will allow developers to build their own exchange using the Binance infrastructure, KuCoin was quick to respond with their own offering. KuCloud is a cryptocurrency trading solution to allow developers to launch their own crypto spot and futures trading platforms.

KuCoin Shares ($KCS) and Fees

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As the cryptocurrency bear market appeared to wear off a few months ago, most token values were stalled in holding patterns. KuCoin’s native KCS token, however, was busy having a bull run all on its own. When analyzing the KuCoin Shares token, there’s a lot to like. Similar to other exchange tokens such as BNB, HT, and BIX, KCS is used to discount trading fees and other exchange services — but that’s not the token’s biggest draw.

True to its name, KuCoin Shares are used to receive a piece of the company pie. Every day, KuCoin takes its daily trading fees, keeps half for itself, and spreads the other 50% proportionally to wallets holding KCS. The bigger your KCS holdings, the more of KuCoin’s revenue you’re entitled to receive. The draw of the exchange’s revenue-sharing model is readily apparent — as long as the exchange continues to be profitable and grow, you can expect, as a KCS holder, to share in the company’s success.

To sweeten the deal, KuCoin has announced a new bonus plan on the horizon. But, in the meantime, they’ve decided to up the ante. Normally, KuCoin takes 10% of its quarterly profits and uses it to market buy KCS which it then burns from the supply. For the duration of the third fiscal quarter, however, KuCoin will additionally buy back and burn KCS — throwing extra fuel on the flame. The exchange anticipates a significant increase in the burn rate which may spur demand.

The Good and the Bad

KuCoin has built a well-deserved reputation as the premier exchange for altcoin hunting. In the current cryptocurrency exchange landscape, no one comes close to offering the sheer variety of lesser-known digital assets that KuCoin does. As such, the exchange fills a niche and has seemingly no close rival. One might argue that Binance shares overlap with KuCoin’s market, but in truth, the two exchanges complement rather than compete with each other directly.

Despite finding success in its niche, KuCoin has decided not to rest on its laurels. Instead, the exchange is looking to decentralize itself with the launch of a blockchain and decentralized exchange in the near future. While such gestures are surely appreciated, the current centralized exchange works just fine if you know what you’re looking for.

Unfortunately, KuCoin’s industry-lagging security practices, which include holding a significant portion of their cryptocurrency in hot wallets is a major concern. It is difficult to overlook this serious flaw when people are putting their own personal money on the line. In the coming weeks, we will continue monitoring how KuCoin is able to recover the lost funds. The crypto community has united around the efforts to retrieve the funds, but it may not be possible to return everything that has been lost.

As cryptocurrency regulations tighten up around the world, the fact that KuCoin allows traders to jump in without going through verification protocols means they’ll likely see an influx of users in the coming months. That may have something to do with the exchange stepping up its design, support, and feature set recently, but ultimately, all of those improvements benefit what is quickly becoming one of the cryptocurrency’s pillar exchanges.

Rating

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TOTAL RATING - 4.3KuCoin is a leading cryptocurrency exchange for good reason. Their asset offerings, fees, and UI design make KuCoin a great option for trading crypto.

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