- Huobi’s stablecoin reserves experienced a significant drop, in response to speculations.
- Despite facing scrutiny, the HT token remained stable.
Cryptocurrency exchange Huobi has experienced a significant drop in stablecoin reserves, in response to speculations about possible arrests of its executives in China.
Contrary to earlier reports, a spokesperson for Huobi has denied any executive arrests, but data indicates a 33% decrease in stablecoin exchange balances, with traders withdrawing $49 million in stables during the last week.
Huobi denies allegations of executive detentions
Hong Kong media previously reported the alleged detention of several Huobi officials by Chinese police, though details were withheld. Questions were raised regarding the exchange’s financial soundness and overall reliability.
Data from DeFiLlama suggested that Huobi’s current balance was around $2.5 billion, down from $3.1 billion at the start of the year. Furthermore, the exchange’s most significant holdings consist of tokens linked to Justin Sun’s universe of enterprises and protocols.
TRX, the TRON token, accounts for 26.5% of Huobi’s assets, while HT, the exchange’s native token, accounts for 20.32%.
DeFiLlama data further revealed that the Chinese exchange has about $1 billion in highly liquid assets, including $886.92 million in bitcoin, $48.27 million in USDT, and $5.41 million in USDC. Although the exchange lacks Ether, it does possess $119.4 million in stETH and $21.8 million in wETH.
Amidst the decline in stablecoin reserves, there’s a renewed focus on their quality, a concern raised by CryptoQuant earlier. Despite possessing $1 billion in liquid assets, the recent outflow of stablecoins and executive investigation have cast doubt on the exchange’s future.
While Huobi maintains some financial flexibility, the current situation adds pressure and challenges to its operations. Despite these developments, the HT token has remained relatively stable, currently trading at $2.66.
At this juncture, Huobi’s executives are likely to face significant scrutiny as they strive to resolve user concerns. Furthermore, regulatory organizations in several countries may closely watch the issue, complicating Huobi’s response even further.
Huobi denied the charges of executive detentions, but the situation was exacerbated by its depleting reserves. Moreover, rumors of executive arrests and massive outflows of stablecoins cast uncertainty over the platform and its future.
