Image courtesy of Justin Sun’s Twitter.
- Huobi has been tagged as insolvent, a claim it has continued to deny.
- There has been a discrepancy observed in its USDT holdings according to on-chain sleuth.
On-chain data has shown that a whale pumped massive funds into cryptocurrency exchange Huobi and this boosted the exchange’s holding of Tether (USDT) and Ethereum (ETH). The funds were sent in two separate transactions; the first transaction featured $200 million USDT on Tuesday morning Asia time while the second one was 5,000 ETH, valued at $9.15 million.
Consequently, the deposits brought Huobi’s supply of USDT up to $273 million, according to data from DeFiLlama and its stUSDT supply is now pegged at $400 million. stUSDT is a Sun-backed project described as the “first real-world asset protocol on the Tron Network” though it is not yet widely supported.
There are speculations that this whale who has come to the aid of Huobi might just be TRON founder Justin Sun. The address associated with the transaction is tagged as one of the top-10 holders of TRX token.
Huobi Sees Massive Outflows Amidst China Investigation
During the last weekend, Huobi experienced huge outflows from its platform worth almost $64 million. The withdrawals were triggered by rumors of insolvency and news about the arrest of Huobi’s executive in China.
Starting since Friday, there have been rumours that Huobi’s leaders were arrested in China for an alleged investigation involving the exchange’s connections with gambling platforms. Also, another top executive was said to have resigned from the exchange, although it is not yet clear if his departure is linked to the alleged case in China.
On the issue of insolvency, fintech executive and angel investor Adam Cochran expressed concerns about Huobi’s insolvency due to discrepancies in its Tether holdings. Cochran looked at the combination of USDT and USD Coin (USDC), and he highlighted that Huobi held less than $90 million of assets as of August 5, suggesting that the exchange might be insolvent.
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The investor is positive that digital asset service provider Binance may be taking a precautionary measure and strategically dumping its USDT holding to trample on the dominance of the token. If this is the case, this may promote other stablecoins that Binance controls and profits from.
A spokesperson from the crypto exchange has denied many of these allegations but it looks like investors are still not confident in the firm. The outflows are still ongoing and data from Nansen.ai confirms that over $92.2 million in Ethereum-based tokens have flowed off the exchange, while $101 million in total across all blockchains has moved during the same time period.
In July, Huobi’s total value locked (TVL) was $3.06 billion, this has now dropped to $2.5 billion amidst the sudden increased outflows. Sun has also urged crypto enthusiasts to ignore the rumors which he believes are being propagated to raise Fear, Uncertainty, and Doubt (FUD).
At the same time, it is worth noting that only a few days ago, Crypto-News Flash reported that the TRON founder withdrew approximately 40.7 million USDT and 11.7 million USDC from Aave.
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