KuCoin Discloses Reason for Undelegating 48B LUNC Amid Raised Concerns

The exchange noted that it had undelegated the tokens due to a switch in the pledge node of its financial account.

Seychelles-based crypto exchange KuCoin recently disclosed that it had to undelegate its 48B LUNC stake because of a switch of the pledge node of its internal financial account, assuring users that it will re-delegate the tokens. The disclosure comes a few days after the exchange suddenly undelegated all 48B LUNC tokens, triggering various concerns among investors, including worries of insolvency.

KuCoin revealed the information through an official Twitter account dedicated to providing updates on support-related queries. “Hi, the KuCoin validator undelegated 48b LUNC because the pledge node of the internal financial account switched,” the handle disclosed in a tweet Thursday. They further assured users that their funds were safe and the tokens would be re-delegated after the 14-day lockup period.

Hi, the KuCoin validator undelegated 48b $LUNC because the pledge node of the internal financial account switched. Rest assured that users asset is safe. We will continue the pledge after the 14-day lock period. This is a normal node switch.

— KuCoin Updates (@KuCoinUpdates) January 5, 2023

The disclosure, which came as a response to some of the concerns raised, was recently highlighted by LUNC influencer Classy, sparking a sense of relief within the Terra Classic community. 

KuCoin undelegated 48B LUNC tokens last month without any prior announcement. Investors’ angst ensued as several individuals raised concerns of insolvency or a decision by KuCoin to cease LUNC delegations completely. Classy had pointed out the worrisome development but found solace because the exchange also undelegated their holdings on other assets such as terra (LUNA) and cosmos (ATOM). 

So @kucoincom has began undelegating/redelegating all of their holdings on their validators on $LUNC, $LUNA & $ATOM (That we've confirmed)

Could this mean that #KuCoin could be going insolvent? Or are they stepping back from validators? pic.twitter.com/zgwpMK4qiF

— Classy ? (@ClassyCrypto_) December 30, 2022

The move raised LUNC’s circulating supply back above 6 trillion tokens, currently sitting at 6.01 trillion, per data from CoinMarketCap and Binance. The asset’s circulating supply had previously fallen below the 6 trillion mark amid the sustained burns and stakes. In addition to its effect on LUNC’s circulating supply, the development also relegated KuCoin to 44th on the list of validators with the highest voting power.

KuCoin’s Continued Support for LUNC

The KuCoin and LUNC relationship remains promising due to the former’s continued support for the Terra Classic community. In September of last year, KuCoin staked 50B LUNC tokens in a day, drastically reducing the asset’s circulating supply and increasing its voting power to 8%, placing it in the top 5 list of validators with the highest voting power.

The community also witnessed the incineration of up to 70M tokens on KuCoin and Binance following the tax-burn implementation by both exchanges, with KuCoin contributing more. In the days leading to the implementation of the tax burn policy, LUNC trade volume surpassed Bitcoin’s and Ethereum’s on KuCoin as it became the most traded asset on the exchange on September 9.

The feat was also achieved on November 18, as highlighted by Classy. The asset’s trade volume surged 32% on KuCoin, becoming the most traded asset of the hour.