Kucoin is using Cloudflare to deny website access during big price movement to profit on liquidations
6 min read
Hey all,
I used to design data centers ( I became a full time crypto trader) and I got very concerned when i saw them using tech i am very familiar with to try and steal peoples money via liquidations.
Trading leverage is risky but to for a company to game the system with thier data center design is just not ok.
below is a screen shot of Kucoin denying access to the website on peak times using Cloudflare.
Cloudflare is used for 2 purposes. To stop a DDOS attack ( millions of bots refreshing a web browser to crash a server) and to defer traffic to redundant servers when server loads peak.
Essentially they are treating all their customers like a DDOS attack and saving money on not having a redundant webserver at AWS ( Amazon Data centers).
Notice*****I am being rate limited ( as in denied access) by cloud flare
When I asked about this on Kucoin i was insta banned
If I was wrong I figure someone would at least talk to me about it.
but when i add this server denail access stuff on top of little nuansces like them removing the liquidation price on margin to increase customer risk I got more concerned.
Their servers are going down way too often as well https://downdetector.com/status/kucoin/archive/
Essentially by not spending more on IT they make more money.
When the servers go down they are still processing institutional orders via the OTC desk
The link below is not spam its to the Cloudflare’s website ( kucoins vendor)
https://www.cloudflare.com/learning/what-is-cloudflare/
They are treating their own customer base as a threatening attack like DDOS
Kucoin is assigned a Cloudflare Ray ID, an identifier like a phone #. Kucoin ray id 69fc3e2db9e762eB
Kucoin uses Amazon Data centers or AWS, they could recitify this whole issue by using geo load balancers aka a gateway load balancer
Instead they let the servers go down and get laggie to make extra money. They save money on IT and make money off liquidations
Roughly 5% of their revenue comes from liquidations.
Helpdesk wont even acknowledge this; I designed data centers, I know how this works for anyone who has questions
I posted this on the Kucoin subreddit and “no surprise” I was banned.
It legitimizes what I am saying as if I was wrong their help desk could have asked me for my support ticket
Edit update********
I went and grabbed the following off their moderator list
This is thier executive team and one developer
u/purekidu/Johnny_KuCoinu/Edith_KCFuture
after tagging these guys on my Kucoin post they changed the moderator list to private
The moderator list wasnt private until my post. The one where they banned me.
HMMMMMMMMMMMM thats a bit SUS
*****edit update*
I am getting alot of questions and a TON mof messages with horror stories and people asking for help
The big question is do they know about this
I personally PM’d the CEO u/johnny_kucoin and he responded
How else do they know ( they are knowingly doing this)
How this works is Amazon data centers charges you by the cumulative resources you consume. ( cpu, gpu, data storage, ram etc)
In these settings you can throttle the virtual machine/ cloud servers resources forcing it to go down. I am not implying that they are doing this.
I am saying they are knowingly using settings that let the server go down repeatedly. There are formulas to calculate loads on concurrent users. They are clearly not using settings or intentionally using settings that trip the server to go down.
If you dig through this archive you can see when outages are being reported. They get a system notice that they hit a threshold of resource utilization.
https://downdetector.com/status/kucoin/archive/
Now in the event, you have a crazy anomaly Cloudflare and Amazon have the ability to redirect to a redundant location with a technology called geo load balancing
Notice in my screenshot that it says there is a gateway issue
that link talks about load balancing the gateway ( offloading the processing power)
They VERY MUCH KNOW THEY ARE DOING THIS
They are getting system notices via email from amazon (e.g. You are at 89% cpu utilization you need to scale or you may face faliure)
Their Amazon (AWS) sales guy is calling them every day trying to sell them more services.
e.g. Hey i am your hypothetical Amazon Sales Guy ” I noticed you guys are throttling cpu load on webservers, can I offer you a bigger package and maybe we should tal;k about fail over locations incase your server goes down under load.
frankly, I would bet my life on it that they know this is an issue and why
There isnt a data center architect (what I did) on the planet that couldn’t answer why their servers are going down. This is 101 level stuff
They also have the ability to kill the back end server ( where trades happen) this is done on all major exchanges like the HK ex
https://www.hkex.com.hk/News/Market-Communications/2016/160425news?sc_lang=en
https://fxnewsgroup.com/forex-news/exchanges/hkex-to-introduce-kill-switch-on-hk-securities-market/
and Chicago CME
https://www.cmegroup.com/tools-information/webhelp/globex-credit-controls/Content/Kill-Switch.html
Essentially the webserver sends a hearth beat signal ( its literally called that) if the heartbeat is not heard all trades pause ( a kill switch)
https://en.wikipedia.org/wiki/Heartbeat_(computing)#:~:text=In%20computer%20science%2C%20a%20heartbeat,parts%20of%20a%20computer%20system#:~:text=In%20computer%20science%2C%20a%20heartbeat,parts%20of%20a%20computer%20system).
This is VERY common design work, like windows to a house level … for lack of better comparrison
In Kucoins instance they let the webserver go down but the back end server was still moving. All the whales use OTC desks and have dedicated access. So they processed the whale orders and let all of us burn alive and took our money
Its safe to say they have ZERO plausible deniability
I can share screen shots with thier help desk if its hellp ful
I went so far as to volunteer to fix the issue for free,
The CEO went so far as to acknowledge the outage happened and they would do the right thing but it was all BULL SH!t
IT was a PR stunt and no one go money anywhere close to thier losses. Here is his reddit post
https://www.reddit.com/r/kucoin/comments/pk7bjm/to_those_affected_by_kucoin_access_issue_on_sep_7/
submitted by /u/HammondXX
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