Last Updated: August 9, 2023
• Huobi is once again at the center of controversy, with recent transfers of 200 million USDT and 5,000 ETH raising questions about its health.
• Tron founder Justin Sun is accused of using customer deposits for personal gain.
• On-chain data suggests Huobi only holds 90 million USDT instead of 631 million per its Merkle Tree Audit in July.
Huobi Under Scrutiny
Huobi , one of the world’s largest crypto exchanges, has rarely been far from controversy since it became heavily linked with Tron founder Justin Sun in October 2022. Recent controversial USDT and ETH inflows have stoked the flames of growing fears over the business’s health.
Justin Sun Accused Of Personal Gain
On Tuesday, August 8, Huobi received two large deposits of 200 million USDT and 5,000 ETH from wallet addresses linked to Tron’s Justin Sun. While a Huobi spokesperson has reportedly denied that these addresses belong to Justin Sun, on-chain analysts are unconvinced. PeckShield further linked the TRX whale address responsible for the large USDT transfer to TUSD, a stablecoin heavily linked with Sun and recently favored Binance. Sun did not immediately respond to a request for comment. The transfers have raised eyebrows after Cinneamhain Ventures Partner Adam Cochran raised questions about Huobi’s USDT reserves.
Questions Over Reserves
In a lengthy X thread on Saturday, August 5, Cochran sharing on-chain data suggested that Huobi only held about 90 million USDT instead of about 631 million per its Merkle Tree Audit in July which could indicate that customer deposits had been redirected for personal yield by Justin Sun’s eponymously named JustLend protocol among others.
Insolvency Rumors Swirl
The revelations have led to renewed speculation regarding the exchange’s health and potential insolvency risks as customers worry over their funds’ safety should anything happen to the platform. The company has yet to issue an official statement addressing these concerns but whether or not they do so soon may be key to restoring public trust in their business operations.
Despite denials from both parties involved any negative publicity surrounding this incident will likely continue until more clarity can be provided as to why such large transfers were made into an exchange already under suspicion or what will be done protect users if insolvency rumors prove true .