- Cryptocurrency expert Adam Cochran said that cryptocurrency exchange Huobi is facing financial problems.
- According to him, the platform’s internal audit for USDT and USDC balance shows inflated figures.
- The organization’s owner Justin Sun said it is FUD.
The CEHV fund’s managing partner Adam Cochran, citing his sources, said that cryptocurrency exchange Huobi is insolvent. The company denied this information.
“So why are we recording a Tether outflow? The likely reason is Huobi’s insolvency. We also know that Binance has started selling USDT, exchange staff and Tron are being questioned by police, this happened shortly after the launch of stUSDT, and the platform’s balance sheet has seen strange shifts over the last month,” he emphasized.
Cockran said it was Binance exchange that first learned of the competitor’s financial problems. According to the analyst, this confirms the outflow of USDT from the platform, as well as statements by CEO Changpeng Zhao.
Remember compared Tether to a “black box”. Also during the day on August 4, 2023, the USDT lost its peg to the dollar on multiple occasions. The issuing company’s CTO Paolo Ardoino noted the “drawdown,” blaming it on some new “competitor.”
Cockran also emphasized the shrinking share of stablecoin directly on Huobi:
According to him, the exchange controls only about $90 million in USDT and USDC. The rest of the funds, about $540 million more, according to Huobi’s own audit, are held in funds controlled by Tron founder and organization owner Justin Sun, as well as some other members of top management.
Cochran believes Binance is selling USDT for two possible reasons – the exchange is promoting the more preferred FDUSD or the company is aware of the real state of affairs at Huobi.
In response, Xandi, the exchange’s head of press, said the information about the questioning of employees is just a rumor. It also denied that the site may be insolvent.
Huobi owner Justin Sun also commented on the news. It limited itself to a brief note that it is FUD.
The platform’s TVL fell from $2.598 billion to $2.5 billion, according to DeFiLlama:
TVL Huobi
The USDT’s capitalization also declined, from $83.85 billion to $84.74 billion, according to CoinMarketCap:
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