Huobi Exchange, one of the leading crypto players in Hong Kong, recently found itself at the center of such rumors regarding its financial health.
However, in a recent Twitter message, Justin Sun, Tron’s CEO and Advisor of Huobi reassured the community by dismissing the FUD (Fear, Uncertainty, Doubt) and expressing his unwavering commitment to the platform’s growth and success.
Justin Sun’s Message of Confidence
Amidst the circling rumors regarding Huobi Exchange’s financial situation, Justin Sun’s Twitter message served as a beacon of assurance for the platform’s users and stakeholders.
“Ignore FUD, keep building TRON and Huobi will thrive through continuous development. Trust in our vision and community efforts for a stronger future. Perseverance guarantees success,” Sun stated on Twitter.
Notably, Sun’s message comes shortly after refuting rumors that he was planning to sell off his stakes in the platform.
Ongoing Uncertainties at Huobi
Recent developments at Huobi have sparked attention and speculation. Over the weekend, Huobi experienced significant outflows amounting to $64 million. Amidst this uncertain environment, the Total Value Locked (TVL) on the exchange also saw a notable decline from $3.09 billion the previous month to $2.5 billion.
The rumors further indicated that the exchange’s leadership had been detained in China due to their alleged involvement with gambling platforms. Additionally, Huobi has also seen the departure of a top executive, raising questions about its leadership stability.
While the head of social media at Huobi has dismissed the rumors and claimed the exchange is performing well, the situation underscores the broader challenges faced by crypto exchanges in a rapidly evolving regulatory environment.
Allegations of Financial Strain Surrounding Huobi
Meanwhile, Fintech executive and angel investor Adam Cochran has drawn attention to apparent inconsistencies in the exchange’s Tether (USDT) holdings. The implications of these allegations suggest the possibility of insolvency, a situation in which an exchange might lack sufficient funds to meet its obligations.
The allegations against Huobi stem from reported discrepancies between the exchange’s on-chain data and its publicly disclosed “Merkle Tree Audit” figures for USDT holdings.
Cochran emphasized that on-chain data on August 5th indicated that Huobi had less than $90 million in assets, while the exchange’s audit claimed they held $630 million in USDT.
This discrepancy has raised significant questions about the veracity of the exchange’s financial reporting and prompted concerns about its solvency.