KuCoin Warns Of Massive Damage To aUSD Stablecoin

The cryptocurrency community of the Acala ecosystem risks not only reputational damage but also harm to the stablecoin, KuCoin warned

The acala stablecoin (aUSD) risks “huge” consequences, and the Acala community suffers reputational risks if the project developers do not correct their report on the results of an incorrect emission. Representatives of KuCoin announced this on the official website of the exchange.

According to the Acala report, an unknown person was able to find and exploit a vulnerability in the iBTC/aUSD liquidity pool to issue just over 3 billion aUSD tokens. The developers have already made adjustments, and the wallet addresses that received the erroneously issued aUSD have been identified.

However, almost $10 million in aUSD has been withdrawn to centralized exchanges, making the process of identifying “fake” tokens more difficult. According to KuCoin, Acala representatives claim that 4.9 million aUSD has been sent to KuCoin. The exchange itself says that the figure is not true and amounts to just over 8 million aUSD. In addition, Acala said that no more than 1 million aUSD is traded on centralized exchanges, but KuCoin recorded 5.3 million aUSD.

According to the exchange’s calculations, the Acala community needs to issue 10.2 million aUSD collateral, rather than the 5.9 million aUSD announced as part of the capital reallocation proposal. If the community ignores KuCoin’s miscalculation concerns, then the exchange will have to freeze and even burn the over 4.3 million aUSD that is now deposited in customers’ wallets. At the time of writing, Acala has not commented on KuCoin’s claims.

Recall that shortly after extra billions were released in Acala, the stablecoin quotes fell to $0.01. Later, the developers managed to restore liquidity, but to the level of $0.8. Since then, aUSD has never been able to return its peg to the US dollar, and the stablecoin has fluctuated from $0.7-$0.8.

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