Connect with us
Active Currencies 14908
Market Cap $2,458,995,116,222.70
Bitcoin Share 51.20%
24h Market Cap Change $-1.25

Unraveling the link between Justin Sun, Huobi & USDT

4min Read

Justin Sun gets accused of malpractice by twitter user. Speculation around Huobi’s insolvency surfaces, as negative impact on USDT becomes possible.

Unraveling the link between Justin Sun, Huobi & USDT

Share this article

  • Claims come to the surface that Huobi may be insolvent due to Justin Sun’s behavior.
  • USDT gets stuck in the crossfire, Huobi representative denies claims.

Despite the massive volatility in the DeFi sector over the past few weeks, the stablecoin sector has been relatively resilient. USDT, tether’s largest issued stablecoin, was one of the top performers in the sector. Due to this, the USDT dominance of the total stablecoin market cap hit its highest point in over 2 years.


Realistic or not, here’s TRX’s market cap in BTC’s terms


Something fishy

However, over the last few days, there was a USDT sell-off that occurred, which could impact the stablecoin. According to Adam Cochran, who is a managing partner at Cinneamhain Ventures and a contributor to yearn finance, Justin Sun may have something to do with the sell-offs.

In his tweet, Adam suggested that the trail of the USDT sell-offs starts with Binance. He stated that based on past behavior with the exchange’s past selling of the FTT token, it is safe to assume that Binance gets wind of risky assets ahead of time.

Over the last few days, it was observed that Binance was offloading large amounts of USDT in bulk. This was weeks after the decline of USDT on Huobi.

stUSDT plays a big role

He then went on to explain how he believed Tron and Justin Sun had a role to play in this. He started out by talking about stUSDT, a staked USDT product launched by Tron.

Adam’s investigation into Tron’s stUSDT revealed a stark contrast between claimed stakers and the token’s actual distribution. Tron’s website asserted that it had 351,380 stakers, but their blockchain data exposed that nearly 98% of stUSDT was directly held by Sun or Huobi. When staking USDT to stUSDT, the funds merged into a Huobi deposit address.

Moreover, Huobi’s Merkle Tree Audit ostensibly lists $630M USDT held by users, though this data ceased updating last month, leading to a discrepancy, with only $90 million substantiated. Justin Sun appears to channel the remaining assets into his defi projects while luring users to deposit more on Huobi through yield incentives.

Based on Adam’s speculation, users believe that they have balances of $631 million on Huobi, however, in reality, the amount is actually $90 million. Adam also went on to state that many of Huobi and Tron’s employees were currently under investigation.


Read Tron’s Price Prediction 2023-2024


However, a spokesperson from Huobi refuted that claim, stating that none of their employees are being investigated by the police, and the thread that Adam made was just creating more FUD and is just a false rumor.

He replied to this comment by stating that the information was confirmed by senior-level executives working at Tron.

It remains to be seen how this plays out. The unfolding of these events may not only have an impact on Tron but also USDT and Huobi users.

State of the tokens

At press time, TRX was trading at $0.077, whereas the Huobi Token (HT) was trading at $2.66. The price of these tokens declined materially over the last few weeks. However, in the last 24 hours, there wasn’t a major change in price observed for either of these tokens as their prices remained stable.

USDT’s market cap remained consistent as well, and there was no massive change observed for the stablecoin in this sector as well.

Source: Santiment

Trader behavior indicated that many of the traders were leaning toward the bearish side. According to Coinglass’ data, the number of short positions taken against TRX had increased over the last few days.

Source: coinglass

New updates

On the 9th of August, it was observed that data on the Defi Llama website had been updated since the data was released on Twitter. The data indicated a positive turn of events for Huobi. At press time, the chart showcased that the USD inflows on Huobi witnessed a significant uptick in the last few days. The information also suggested a shift from a negative net inflow of -$24.82 million to a positive $1.79 million.

Source: Defi Llama

Share

Himalay is a full-time journalist at AMBCrypto. A Computer Science graduate, Himalay writes about crypto with a special focus on the latest coin-based updates. He is a fan of gonzo journalism, transgressive fiction, heavy metal, and Manchester United.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.