Justin Sun Clarifies As Huobi Insolvency Rumors Spread

Bhushan Akolkar
August 7, 2023
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TRON Founder Justin Sun Dumps 173M TRX To Binance, Price Dip Ahead?

Over the last weekend between August 5-6, crypto exchange Huobi witnessed massive outflows worth $64 million amid rumors of Chinese authorities investigating its executives and the fears of possible insolvency.

Amid the ongoing rumors, the total value locked (TVL) on the exchange dropped significantly to $2.5 billion, from $3.09 billion last month. There were rumors that the leaders of the exchange were arrested in China on August 4. The rumors suggested that this was because of an investigation related to the exchange’s involvement with gambling platforms.

It seems that authorities in China are getting stricter with cryptocurrency exchanges. Also, one top executive has recently left the exchange, but it’s not clear if it’s connected to the investigations in China.

However, Huobi’s head of social media has called the rumors untrue adding that the exchange is “currently doing well”.

There are allegations that the crypto exchange may be facing financial problems. Fintech executive and angel investor Adam Cochran pointed out some inconsistencies in the exchange’s Tether (USDT) holdings.

According to on-chain data, Huobi had less than $90 million of assets on August 5, but their latest ‘Merkle Tree Audit’ claims they have $630 million in USDT held. Cochran suggests that this means Huobi could be insolvent, meaning they might not have enough funds to cover their obligations.

Justin Sun Responds On Huobi Insolvency

Huobi exchange chief Justin Sun has responded to the rumors regarding the insolvency of the exchange. In his recent message on Twitter, Sun noted: “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!”

On the other hand, Huobi has been closely following all the crypto-friendly developments in Hong Kong, which has recently introduced a crypto framework for companies to operate in the region. Earlier this year in February 2023, Huobi also applied for a crypto trading license in Hong Kong.

In the past, there have been several news of troubles at the Huobi exchange. However, Sun and his team have continued to communicate in every instance,in order to maintain transparency.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.