KuCoin went down on Saturday during a major shift in the market. KuCoin is a centralized crypto exchange based in Hong Kong that offers leveraged crypto trading to retail customers. Since the outage happened during a time when many traders' leveraged positions were being liquidated, some suspect foul play.
In a massive post on r/cryptocurrency, a KuCoin retail trader laid out his belief that KuCoin profits from liquidating users and saves money by underinvesting in their server infrastructure. The post is fairly convincing, but no one outside KuCoin can be sure of the exchange's motives, and there is evidence that KuCoin's terrible software may have caused the issue on its own.
KuCoin CEO Johnny Lyu made his own Reddit thread to address concerns among traders. Lyu claims that KuCoin does not profit from liquidating user accounts. This is probably true, but there have been cases where crypto exchange executives have used their internal order books to trade against their customers. Since KuCoin's retail customers were affected but its institutional customers were not, it's also possible that KuCoin's outage allowed retail accounts to be liquidated while institutional customers continued to trade.
Is bad software to blame? Lyu claims that KuCoin spends twice as much on cloud infrastructure as similar-sized competitors. In software development, spending more on cloud infrastructure is seen as a weakness of the software. KuCoin spending double the average on cloud services doesn't mean users get double the access to KuCoin's products--it means KuCoin's engineers did a bad job. Then, of course, there's the outage record. Financial services that are executed properly don't go down every week.
Whether KuCoin profits directly from outages or simply accepts them as a consequence of poor software investment, the company did not seem to lose much in the wake of the outage. The market cap of KuCoin Token (KCS) remains steady at roughly $1.2 billion.