Numerous rumors surrounding Bitcoin and altcoin exchange Huobi and the so-called “shadow owner” Justin Sun are currently feeding market fears. Seychelles-based exchange Huobi has seen a significant increase in net outflows over the past 24 hours, according to Nansen data. The exchange is said to have also shut down internal communication channels, forcing employees to receive salaries in stablecoins, and canceling various employee benefits. Here’s what happened…
There are collapse allegations for the famous Bitcoin (BTC) exchange
cryptocoin.com As we reported, the crypto exchange Huobi Global, which is said to have been bought by Justin Sun through a brokerage company in October, has been surrounded by all kinds of rumors lately. Huobi denied some of the allegations and confirmed others. The crypto exchange has confirmed that it will cut about 20 percent of its workforce. The news comes with rumors that Huobi has shut down its internal communication and feedback channels. The company also allegedly wants its staff to sign up for Huobi accounts to receive salaries paid with stablecoilers.
“The planned layoff rate is around 20 percent, but not currently implemented,” a company spokesperson said. However, they denied the rumors that internal communication and feedback channels were closed. They said that the claims that the fringe benefits provided to the employees were cut are not true. According to CoinRanking, Huobi Global is currently the 10th largest crypto exchange in the world in terms of trading volume.
Justin Sun trades USDT and USDC
In August 2022, Huobi founder Leon Li began announcing his interest in selling his 60 percent stake in the company. In early October, the stock market struck a deal with Hong Kong-based investment firm About Capital, giving it control of a majority stake in the company. Tron founder Justin Sun is said to have used About Capital as a brokerage firm to acquire Huobi. Sun denied the allegations, insisting that he only joined the company as a consultant. Interestingly, data shows that Sun moved roughly $100 million in USDT and USDC to the exchange earlier today.
#PeckShieldAlert JustinSun-labeled address has transferred ~100M stablecoins (50M $USDT & 50M $USDC ) to Huobihttps://t.co/gCYJfLR4yF pic.twitter.com/CUhvKeUJBs
— PeckShieldAlert (@PeckShieldAlert) January 6, 2023
Increase in the amount of funds withdrawn from Huobi
Meanwhile, $60.9 million of last week’s $94.2 million net outflow to the stock market was realized in the past day alone. The largest withdrawal requests came from wallets with high balances. It is also mostly in USDT, USDC and ETH. As recently as December 15, DefiLlama reported that the crypto exchange saw an inflow of $87.9 million. A total of $204.65 million has flowed out since then.
On the other hand, according to Nansen’s data, the crypto exchange has $2.8 billion worth of client funds, so current exits can be considered normal. As Nansen wrote, the increased withdrawals may have been triggered by rumors that Huobi was “probably justin Sun’s fortune melted down in real time.” Chinese journalist Collin Wu first surfaced the allegations against Huobi on December 30.
A longstanding criticism of Huobi concerns its reserves. Of all the top exchanges, Huobi relies the most on its own tokens to announce its reserves. About 50 percent of its reserves are made up of HT (31.41%) and Tron (17.26 percent). Another factor that raises concerns is that Huobi owns 81 percent of the circulating HT supply (131.6 million out of 162.2 million).
