- Huobi is again at the center of controversy as concerns over the business resurface.
- Recent controversial USDT and ETH inflows have stoked the flames of growing fears.
- Tron founder Justin Sun is accused of using customer deposits for personal gain.
Following reports that Chinese police have arrested executives at the exchange, fears over its health have again resurfaced, with recent questionable inflows into the exchange only serving to feed the growing concerns.
Giant Whale or Just His Excellency?
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.
In a lengthy X thread on Saturday, August 5, Cochran sharing on-chain data, claimed that Huobi only held about 90 million USDT instead of about 631 million per its Merkle Tree Audit in July. Cochran suggested Sun had redirected customer USDT and ETH holdings to earn personal yield, naming Sun’s eponymously named JustLend among the protocols to which the Tron founder had redirected customer funds.
Cochran also shared a notice supposedly from Huobi that suggested that staff were assured that Sun had enough personal wealth to cover any holes in the exchange’s balance sheet.
“Feeling some heat your excellency,” Cochran quipped in an X post on August 8, responding to the recent large USDT transfer from the Sun-linked address. The Cinneamhain Ventures partner asserted that the Huobi Global Advisor was returning customer deposits that he had redirected for personal gain.
Defi Llama data indicates that Huobi holds 269 million USDT at the time of writing.
On the Flipside
- Justin Sun withdrew $60 million worth of assets from Huobi amid recent concerns over the exchange’s health.
- Huobi’s Q1 report raised transparency concerns earlier in the year.
Why This Matters
Huobi is among the largest crypto exchanges in the world, with at least $3 billion in customer deposits. Trouble at the exchange could pose problems for the broader crypto market.
Read this to learn more about the concerns surrounding Huobi:
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