There are a lot of ways for a cryptocurrency exchange to stand out and one of them is to offer no fees on deposits. However, the exchange still has to make money somewhere. Some exchanges, like KuCoin, make their money by allowing users to deposit funds for free but then charging a withdrawal fee.
A recent KuCoin review published by Cointelligence examined the exchange’s withdrawal fee structure. While many exchanges charge a flat fee for all transactions or a percentage of the transaction, KuCoin has a unique fee schedule where each currency has its own withdrawal fees based on the market-related performance of the currency. They also have different minimums for how much of each currency can be withdrawn at a time. This is a strangely complicated system, requiring traders of multiple currencies to keep track of a variety of different minimum amounts and fees.
KuCoin also charges a trading fee, but they offer traders a discount on this fee based on how many KuCoin Shares (KCS) they have, with a maximum discount of 30% available for users who have 30k or more KCS. Offers like this are one way that exchanges seek to make their utility tokens have actual value (or utility) for their users.
Is KuCoin a good exchange?
The KuCoin exchange review by Cointelligence gives the platform an average score. They have high marks for the usability of their system, but high risk due to issues such as a lack of insurance for user funds. This is a common but still alarming issue with many cryptocurrency platforms.
There is also some suspicion surrounding KuCoin due to accusations of manipulating trade volumes. In February, news broke that KuCoin was allegedly engaged in wash trading and had been threatening low-performing projects with having their tokens removed from the exchange unless they paid “volume-boosting fees” to the tune of around $180k. This is the kind of skeevy behavior that gives cryptocurrency exchanges and the whole digital asset class a bad name. This is a much bigger controversy than the one in August 2018, which centered around KuCoin’s Hong Kong offices being empty, leading to speculation about the exchange being in the midst of an exit scam — this was clarified as the Hong Kong office being a mailing address and the employees being located in other countries.
Users have to decide on their own what does and does not make for a good exchange. It seems that almost every digital currency trading platform has some black marks against it, whether it’s past hacks, rumors of inflated trading volume or an anonymous team. In that last regard, KuCoin is at least publicly open about who is on their team, and they seem to be qualified to run an exchange.
Do fees matter?
Ultimately, fees are a part of the exchange process, and it’s important to find a fee structure that works for you and won’t eat too far into any profits you may make from trading cryptocurrency. KuCoin’s withdrawal fees may not be of too much concern to users who are focused on coins who have low fees, but others may find them too confusing and annoying. Luckily, there are plenty of exchanges to choose from!
Edited by Tom Stankewicz
Disclaimer: This guest post is for informational purposes only and should not be taken as investment advice. It does not reflect the views of SludgeFeed or our editorial staff. Always conduct your own due diligence before making investments.