What’s Happening With Huobi Exchange?

Man looking up in uncertainty towards a blue robot.
  • Huobi has reportedly canceled all year-end bonuses and resolved to cut some employees’ salaries.
  • Reports say the exchange has ordered employees to accept USDT/USDC salaries or face dismissal. 
  • Some Twitter users claim Huobi has shut down all communication channels with displeased workers.
  • Since mid-December, Huobi has witnessed $204.65 million in outflows.
  • Justin Sun addressed the speculations in response to growing concerns.

There are rumors that popular crypto exchange Huobi is about to join the growing list of crypto firms in crisis. Since the start of the year, the crypto exchange has been in the news negatively, heightening doubts about its future.

Notably, the saga started following speculations that the exchange reportedly canceled all year-end bonuses and resolved to cut the salaries of some of its senior employees. A crypto journalist, Collins Wu, cited insiders in confirming the speculations, stressing that Huobi has also perfected plans to lay off 1,200 employees in its team.

Fresh reports from Reuters claim that Huobi’s advisor Justin Sun confirmed that 20% of its employees would be laid off this quarter.

Some reports said the exchange had ordered employees to start accepting salaries in USDT/USDC or risk dismissal. This development has reportedly resulted in various demonstrations by the firm’s employees, thereby heightening internal pressure within the exchange. 

These employees usually receive their salaries in fiat currencies. This development thus sparked fears that the exchange might be enduring a financial crisis.

Communication With Huobi’s Internal Employees Was Allegedly Blocked

Huobi has shut down all its communication feedback channels with the displeased employees, according to a Twitter account identified as BitRun. The account warned that such development might encourage the collaboration of these employees in rugging away users’ assets. 

BitRun, however, advised users to begin to withdraw their assets from the exchange before it was too late. 

Futurizts, a separate account, said the exchange indeed blocked its employees, citing insider sources. The account, just like BitRun, warned users with assets on Huobi to consider withdrawing them quickly.

Another account, identified as Thichruiro, also confirmed the shutting down of communication channels by the exchange, accusing its general adviser, Justin Sun, of cashing out over $1.5 billion from the exchange since October. Again, this raises questions about the firm’s transparency.

Amidst this crisis, Huobi recorded an inflow of $87.9 million since mid-December but witnessed a total of $204.65 million in outflows during the same period, according to DeFi analytical firm, DefiLlama.

According to the Nansen analytics firm, $60.9 million of the $94.2 million net weekly withdrawals occurred in the past 24 hours alone in the form of Ethereum, Avalanche, BNB Chain, Fantom, and Polygon flows.

In response to growing concerns about Huobi plunging into a liquidity crisis, Justin Sun addressed the speculations, insisting that the exchange is in good shape and would continue to secure users’ assets without any hitches.

Additionally, the Huobi advisor claims that the number of newly registered users and capital inflows exceeds the peak in 2022 on an average daily basis. Further, Huobi seeks to respect the legal demands of its local employees fully, according to Justin Sun. 

On the Flipside

  • Huobi’s token (HT) price dropped 12% on Thursday after Justin Sun attempted to dismiss concerns in a Twitter thread. Further, TRX, Tron Network’s coin, also dipped in value by 7.68% in 24 hours.

Why You Should Care

In 2022, the crypto space faced severe market downturns in the form of bankruptcies, liquidations, and layoffs. There will be further damage to the overall crypto ecosystem if the Huobi exchange falls into a similar crisis as FTX.

 

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Soumen Datta

Soumen has been a dedicated researcher and writer in the field of cryptocurrencies for the last few years. Even though Indian crypto regulations are still unclear, he believes that India will continue to innovate in the years to come. He loves to play his guitar and sing along in his spare time. He holds bags mostly in BTC, ETH, BNB, MATIC, ADA.