A cryptocurrency exchange called KuCoin is anticipated to help new stablecoin activities by funding a Chinese startup.
The primary investment arm of the cryptocurrency exchange, KuCoin Ventures, oversaw a $10 million funding round for the stablecoin tied to the Chinese yuan.
For CNHC stablecoin, KuCoin leads a $10 million investment round.
A $10 million investment round for the stablecoin issuer CNHC, which is pegged to the value of the offshore yuan, was headed by the cryptocurrency exchange kuCoin.
In essence, KuCoin’s venture arm announced that certain key industry investors, including KuCoin investor IDG Capital and Circle Ventures, the investment arm of Dollar Coin, participated in the funding round. KuCoin is a Chinese cryptocurrency exchange that is registered in the Seychelles.
CNHC co-founder Joy Cham reportedly stated that the site introduced its offshore yuan-anchored stablecoin CNHC roughly two years ago.
In addition, Cham said of the stablecoin that it was “more like a domestic settlement instrument,” referring to CNHC’s small exposure. The CEO also mentioned that CNHC provides settlement service in other significant stablecoins, such as Tether (USDT) and USD Coin, at this time (USDC). At the moment, TruBit Pro Exchange is the sole exchange where CNHC is traded.
KuCoin and the cryptocurrency exchange’s initial stablecoin investment
It appears that KuCoin Ventures’ investment is its first step towards establishing a stablecoin. Justin Chou, chief investment officer and head of KuCoin Ventures, reaffirmed this.
Following are Chou’s words:
“KuCoin is always interested in developing a more reliable financial system infrastructure […] The creation of stablecoins requires a delicate balancing act between efficiency and excessive collateralization in order to maintain the financial market’s stability. More algorithm-based stablecoins are welcome, but they must demonstrate their toughness.
In the beginning of 2022, KuCoin Ventures would also spend an additional $10 million in the Chinese blockchain project Conflux. These investments presumably represent the “crypto-exchange financier’s” backing for Web3 infrastructure in Asia-Pacific.
New York’s subpoena
And while KuCoin should focus on Asia, it doesn’t seem like that is the case in New York. In fact, Letitia James, the attorney general of New York, has just launched a lawsuit against the cryptocurrency exchange situated in the Seychelles.
It has been functioning in the US state without registering with the authorities, and this is the reason.
According to reports, KuCoin is being investigated for allegedly flouting state laws by allowing New Yorkers to buy and sell cryptocurrency on its website.
The Martin Act, which gives the attorney general extensive authority to look into and punish financial wrongdoing, is allegedly broken by the cryptocurrency exchange.