Huobi Global saw a net outflow of $60.9 million today after Pionex’s move on January 5th. Fund outflows are on the rise after reports of the exchange laying off employees surfaced on social media. A large amount of altcoins such as Ethereum and Avalanche are withdrawn from the exchange…
Huobi saw $61M net outflow in one day
Earlier today, reports surfaced about infighting in the Chinese crypto exchange. Huobi reportedly blocked internal communications groups to stop the rebellion. Later, Justin Sun confirmed that Huobi will lay off 20% of its staff.
Blockchain analytics firm Nansen reported that $60.9 million of last week’s $94.2 million net outflow occurred in the past 24 hours alone. News of the massive withdrawals coincided with the depreciation of Silvergate Capital’s shares last night. Silvergate Capital was closely associated with FTX and had to sell $5.2 billion of debt securities at a loss of $718 million to meet withdrawal demands.
These altcoins are withdrawing
Data provided by Nansen reports that up to $94.2 million weekly outflows of massive funds are occurring through networks such as Ethereum, Avalanche, BNB Chain, Fantom, and Polygon.
Apart from that, the most withdrawn cryptocurrencies from Huobi, mostly from high-balance wallets, were USDT, USDC and ETH.
Causes of the Huobi crisis
Nansen also cited Twitter @Cryptadamist’s tweet thread as the source of the increased withdrawals. The researcher summarizes the events around Huobi with a long flood:
Huobi is probably melting in real time with JustinSun’s fortune… It seems that JustinSun tried to dissolve the company (probably putting all employees out of work). Just yesterday it was reported that JustinSun forced Huobi employees to pay in USDT and/or USDC. Someone on Twitter is sharing rumors that there are concerns that this will spread to TRON and the Pulse companies… Here’s another coincidence: Just yesterday the United States Department of Justice (DOJ) took action to seize Silvergate bank. Some of this money reportedly belongs to FTX. By the way, Huobi has been selling BONK and PI lately, which looks like a scam But then the PI development team pointed out that the PI hadn’t been published yet, so whatever Justin Sun was selling, it was just like a promissory note. (You can continue the rug pull claims in the tweet below.)
Justin Sun tries to put his customers at ease
After news broke that Huobi had laid off 20% of its staff, Justin Sun took to Twitter to reassure customers about the future of the stock market. Sun tweeted that as a leading cryptocurrency exchange, their strategy is to focus on the long-term and not get caught up in short-term distractions. In order to give confidence to investors, he said they are investing heavily in technology to provide a reliable platform to their customers.
Meanwhile, Tron’s stablecoin USDD, backed by Justin Sun, dropped as low as $0.9754 today amid events.
Similarly, Huobi’s native token HT dropped as much as 12%. The sales that occurred on January 5th still have not recovered. Huobi Token (HT) is trading at $4.65 at the time of writing.
cryptocoin.comIn this article, we have included the decision of Pionex, one of the starting points of the crisis.