From lines of code at a laptop to international crypto exchange: a story behind KuCoin

Behind the KuCoin creation, there are two tech geeks who were early blockchain adopters. Having started coding at the age of 8 and founded his first startup at 16, in 2012, Michael heard about Bitcoin (BTC) from his boss Eric at a private equity investment firm IDG Capital, and immediately began mining. While he tried to sell some Bitcoin on the Mt.Gox exchange, which was the world's largest trading platform at the time, he discovered how difficult it was for beginners to navigate.

By the end of 2013, realizing the potential of crypto, Michael and Eric wrote the first code at a cafe. In 2017, they decided to focus on their venture full time and created the “People’s Exchange,” KuCoin.

Cointelegraph talked to Johnny Lyu, the CEO of KuCoin, about the struggles and successes of running one of the world’s biggest crypto exchanges. 

How did KuCoin change over time?

Following KuCoin's rapid growth, we received $20 million in funding from IDG Capital and Matrix Partners in 2018. In 2019, we launched innovative products such as KuCoin 2.0, Spotlight, KuCoin Futures, Earn (formerly known as Pool-X) and Margin Trading. These have propelled KuCoin from a crypto exchange that only has spot trading services to a platform that offers a diverse range of crypto financial services.

We are constantly innovating our products. As a result, we now offer over 640 tradable assets, have become a veritable Top 1 Altcoin Exchange and rank among the top five on CoinMarketCap. Forbes Advisor has named KuCoin the best cryptocurrency trading platform in the world in 2021.

In 2022, The Ascent, a Motley Fool service, named KuCoin the Best Cryptocurrency Apps for Enthusiasts.

What is the most difficult struggle the exchange had to overcome and how did it do it?

I think the most significant difficulty for an exchange, or a crypto company, is balancing and allocating the company's limited resources — whether to invest more in R&D to develop more products or to invest more in marketing and sales to gain a larger market share. 

At one point, KuCoin faced this dilemma. After the crypto industry entered a bearish market in 2018 and the sector slowed down, we were faced with two choices: to increase investment in market expansion or to get ready for the long term by improving its infrastructure and bolstering the team.

KuCoin ultimately chose the latter. Since then, we have launched an entirely new line of innovative products. 

What is KuCoin’s biggest achievement so far?

KuCoin has been moving toward facilitating the global free flow of digital value as well as getting everyone involved with crypto since its inception.

In the past four years of development, we have gone from a founding team of seven people to almost 600 employees all over the globe and over 10 million registered users, serving users in more than 200 countries and regions worldwide.

Behind these numbers is the trust and support of every KuCoin user, and I think this is KuCoin's most valuable asset and our most outstanding achievement.

What kind of updates and products should KuCoin users expect this year? 

This year, as a Top 1 Altcoin exchange, we will be mining more crypto gems, exploring and experimenting more with social trading and social trading features.

KuCoin's decentralized ecosystem has developed over time, and we have achieved results in a number of areas, including public chains, wallets, nonfungible tokens (NFTs) and GameFi. Next, we will further expand KuCoin's decentralized ecosystem.

On the one hand, we plan to offer users more decentralized products, such as our decentralized trading solutions. As a member of the KuCoin Community Chain (KCC)public chain KCC, we will also promote its further development. On the other hand, we will also expand KuCoin's reach in the decentralized field, especially in the metaverse, Web 3.0 and other essential areas in the future. In addition, we will work to further build a broader and more diverse ecosystem through incubation, investment and acquisitions.  

It looks like the crypto industry is in a bear market with some voicing opinions about potential “crypto winter.” How do you think it’ll influence the development and adoption of the crypto industry, given the interest we’ve seen over the past two years?

First, I think the crypto market is in a correction rather than in a bearish market. Secondly, I look at the market downturn from a developmental perspective. Short-term lows are necessary for developing things and contributing to long-term growth.

A brief downturn is actually conducive to the long-term growth of an industry. In the past two years, the space has experienced rapid development. The entry of many traditional funds has caused a lot of disruption within the industry. After the market has calmed down, only projects with real value and potential that focus on technological innovation and application survive. 

What traders and investors can do to minimize losses when markets are unstable?

I don't usually give any trading advice because I'm more of a “hodler” than a trader. In general, at all times, investors should put their money within the range of what they can afford to lose. 

This is particularly important as we enter a correction period where market uncertainty increases. Investors should increase the fault tolerance of their investments by reducing their leverage to ensure that even if they misjudge the market’s direction, they have enough time and capital to correct that mistake.