What Really REALLY Happened Between SaTT and KuCoin?
We thought we had resolved our problem with KuCoin when yesterday we were alerted that KuCoin threw a grenade our way.
On Sep 24, we updated our community that KuCoin had refunded our money back in full as agreed. Our request for them to arrange for deposit withdrawals for our community was also implemented.
Hence we announced that our dispute was over.
However, the very next day on Sep 25 after our announcement, we were alerted to the fact that KuCoin posted a blog article “to inform the public about the truth”.
They basically posted our low risk security threats in the article which we had already happily shared with the public . We even posted our FULL security audit report in pdf format for all to see. We are not trying to hide anything here. Transparency is key when you are in blockchain and we are firm believers.
We don’t know what kind of argument KuCoin thinks they have when they currently have projects on their exchange that have low-mid-high security risks. It doesn’t make sense to us.
We have actually questioned them about this and they did not reply to us.
Our audit was done by John Wick, an extremely established, reputable and trusted security lab in the industry. We entrusted our audit to them and they passed us. You can read our full audit report here in pdf format.
It is actually common industry knowledge that most projects do not get perfect security audits. There will be some low-mid security threats. As long as these threats do not put the exchange at risk, it is safe for the exchange to list the project. If KuCoin did not want to list us because of our low risk security threats, then they should not be listing projects with low-mid-high risk threats. That would make sense to us and we would definitely accept their logic.
We also explained to KuCoin that if they wanted us to remove the few low risk security threats we had, we were willing to do it but it was going to be complicated because we had 15,000+ SaTT wallets.
Fixing the smart contract was not the problem; implementing the token swap to populate 15,000+ wallets was the problem.
The ETH gas fee has been extremely high due to DeFi and any holdups in any of the 15,000 SaTT wallets would cause a bottleneck for our entire network.
The time to fully implement this token swap was estimated to be about 5-6 weeks. Mind you, we were already at the point where the deposit opening was supposed to happen. All announcements to our community had already been made and we had already spent thousands promoting the KuCoin listing across major news media. This might be a small matter to a big exchange like KuCoin but it wasn’t a joke to us.
The crux of the matter for us was this: WHY PENALIZE US over low-risk security threats when they had projects with high-mid-low risk security threats? It was a crucial time for us, on September 23, when the deposits were supposed to open. Shouldn’t KuCoin at least try to work with us to come up with solutions that we could implement over time? Instead, they announced that they were cancelling our deposits and then delisting us. There was no consideration of the damage they had done to our reputation.
That night on September 23, they said they would refund us 70% of our listing fee. After a heated argument where we reminded them of their missteps, they agreed to refund us 100%.
The point is, during a listing procedure, shouldn’t all DD and compliance be completed BEFORE even collecting listing fee from a project and definitely before listing dates are agreed upon and announced? Why did we even get a listing date confirmed if they were not already fully satisfied with our project? What has been consistent with our listing process with KuCoin was their constant request of documents that had already been submitted and in certain instances, more than three times. There was consistent backtracking in the process which made the procedure complicated and difficult.
Since they were willing to agree to a 100% refund, at this point we also agreed to make a joint announcement that we were both cordially cancelling this listing partnership, but ONLY AFTER the 100% return of the listing fee.
However instead of returning us the 100% as we agreed on, they shortchanged us 35% of the USDT refund and also withheld 30% of the SATT token payment portion. But the final straw was the email that accompanied the partial refund. KuCoin communicated that:
That did it for us. First they went back on their word and did not refund us 100% as promised. Then they also threatened us with a potential lawsuit (“initiate legal actions”).
Maybe other projects in the past have backed down when confronted with threats like this. We are not “other projects”.
We have seen some trolls online asking us what the hell we thought we were doing, the small fry that we were, compared to a big exchange like KuCoin. Our answer? Just because you are small doesn’t mean you can’t have a voice. Why are we even in blockchain? Because we support transparency and decentralization, factors that will drive us towards a more equitable world.
We currently have very good working relationships with the exchanges who have listed us and others who are going to list us. They have been offering excellent support for our listings and we want to take this opportunity to commend them.
As you already know, we responded to KuCoin’s actions with this. Thanks to the positive reaction from our community to our explanation and their continued support, KuCoin refunded us the difference and we also managed to get KuCoin to arrange withdrawal of SATT tokens until Oct 1st for those who had placed trading deposits.
Hence our announcement on our official blog and social media channels that the dispute was resolved. But then KuCoin decided to flog that dead horse again and so this blog article was written as a response.
In the meantime, we heard that the security at KuCoin has been breached and that withdrawals have been suspended until further notice. For those who still have not made their SATT token withdrawals yet, please check directly with KuCoin for updates.
It’s ironic how an exchange that claims to be applying almighty security protocols and standards just got compromised. On reflection, we realize we actually just escaped by the skin of our teeth from being one of the listed tokens that got stolen from KuCoin.
It has been an eventful week.