фото показано с : invezz.com

One of the biggest cryptocurrency exchanges, Huobi, experienced massive outflows of $64 million over the weekend, impacting its overall long-term value.

DeFiLlama data shows that in just one month, the exchange’s TVL decreased from $3 billion to $2.5 billion. This is a severe setback to Huobi, which has been struggling to maintain its Chinese market share amidst regulatory issues. In fear of losing their funds in case of insolvency, many cryptocurrency investors are shifting their funds to other platforms.

Huobi has been in the headlines following rumours about its reserves and an alleged investigation by the Chinese authorities. This has caused the exchange to experience difficulties as concerns about its financial stability escalate.

On August 4, unfounded rumours about the detention of Huobi’s top executives in China started circulating. All of these rumours were connected to a purported investigation into the exchange’s association with gambling websites in China.

A Huobi representative, however, denied these allegations and insisted that the exchange was running smoothly. Interestingly, the rumours surfaced at a time when Chinese officials are allegedly scrutinising domestic cryptocurrency exchanges a lot more closely.

While the exchange is putting on a brace face on the outside, there are reports that it is undergoing internal changes as a result of the rumours. Recent weeks have reportedly seen the departure of a few top executives, including at least one C-level executive. However, it’s still unclear whether these departures have anything to do with the ongoing inquiries.

Huobi’s insolvency concerns are further confounded by allegations that the exchange is holding far less Tether (USDT) in its reserves than reported in its reserve reports. There are also claims that Binance, the largest cryptocurrency by trading volume, has offset a huge chunk of USDT, something that could possibly destabilize Huobi.

One fintech executive and investor by the name of Adam Cochran claimed on the X platform that Huobi may not have as much as it claims. Adam also believes Justin Sun, creator of the Tron network, may have put Huobi’s finances in danger by using customers’ money to finance his own decentralised finance (DeFi) initiatives. He added that Sun converted half of the 141,000 ETH held by Huobi users into stETH.

Adam further added that Binance might be selling Tether in order to undermine Huobi while promoting other stablecoins that Binance controls and generates revenue from. He believes that Binance may be aware of potential issues with Huobi’s Tether holdings and is attempting to protect itself from a sell-off by Huobi users.

Cochran noted that Huobi held less than a combined $90 million in USDT and USD Coin (USDC) as of August 5. Nevertheless, according to the exchange’s most recent “Merkle Tree Audit,” “Huobi users have $630M in USDT held and a wallet balance of $631M USDT.”

According to Cochran Huobi is “deeply insolvent.”

It is also important to note that Huobi is also facing challenges in other jurisdictions outside China. In May this year, an enforcement action by the Malaysian securities regulator forced the exchange to cease operations in Malaysia.

The post Huobi takes $64M hit in outflows over the weekend: here’s why appeared first on Invezz.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

81 +