Key Takeaways
- Huobi’s TVL has been on a steady decline, dropping from $3.1 billion at the beginning of the year to its current balance of $2.5 billion
- Huobi suffered a staggering outflow of $64 million over the course of a weekend,
In the past week, Huobi’s stablecoin exchange balances have experienced a significant dip, with traders withdrawing $49 million in stables, representing a 33% decrease. This comes amidst a series of troubling events for the cryptocurrency exchange, including reports of senior executives from offshore exchanges being detained and investigated by Chinese police, as mentioned by Colin Wu of Wu Blockchain.
Data from DeFiLlama reveals that Huobi’s total value locked (TVL) has been on a steady decline, dropping from $3.1 billion at the beginning of the year to its current balance of approximately $2.5 billion. On-chain data indicates that a considerable portion of Huobi’s holdings is tied to tokens affiliated with the Justin Sun universe of companies and protocols.
Recently, Huobi suffered a staggering outflow of $64 million over the course of a weekend, contributing to the decline in its TVL. The sudden transfer of funds raised concerns about the exchange’s financial stability, which were further exacerbated by speculation that Tether (USDT) holdings might be inconsistent. Adam Cochran, a respected crypto Twitter analyst, suggested that Huobi’s USDT holdings were not as substantial as claimed, potentially jeopardizing the exchange’s financial health.
Cochran also pointed fingers at Tron network founder Justin Sun, alleging that Sun might have used Huobi customers’ funds to support his DeFi projects, further adding to the financial uncertainties surrounding Huobi.
Additionally, Cochran proposed that Binance might be selling Tether to weaken Huobi, possibly promoting other stablecoins under its control to profit from any potential decline in USDT’s value. These allegations have fueled further doubts about the exchange’s situation and prompted internal changes within Huobi, with reports of key executives, including C-level personnel, leaving the company in recent weeks.
Rumors about the arrest of Huobi’s leadership in China have also circulated, linked to an alleged investigation into the exchange’s association with gambling platforms. However, a Huobi spokesperson denied these claims, asserting that the exchange is operating smoothly. Nonetheless, the rumors coincide with increased scrutiny by Chinese authorities on cryptocurrency exchanges within the country.
Huobi’s head of social media responded to the claims, stating that the reports of police involvement were mere rumors and that the exchange’s operations have been functioning normally.
The situation remains fluid and complex, with conflicting reports and accusations flying from various sources. As Cochran’s claims are based on information from a senior executive at Tron, more investigation is required to validate the allegations and determine the true state of affairs at Huobi. Throughout the year, Huobi has faced various challenges, from laying off 20% of its staff in January to an order to cease operations in Malaysia
