Clients of major crypto exchanges are withdrawing money en masse

After the troubles at FTX and several other leading crypto companies, there were fears that other major exchanges would follow FTX. Huobi was one of those companies. Now there are rumors about a possible insolvency again, and customers are again taking their cryptocurrencies from the platform en masse.

Large amounts of bitcoins flow out

Data from DefiLlama shows that the amount on Huobi crypto wallets has already shrunk by about $1 billion since the end of June. That brings the total value to about $2.5 billion, down about 20% from a month and a half ago. The sharpest drop occurred in mid-July, but at the time of this writing, the crowd hasn’t stopped shrinking.

In addition, reserves have shrunk much further since 2020; even by 90%. According to data from CoinGecko, the amount of Bitcoins (BTC) Huobi holds in its coffers has dropped from 440,000 BTC to just 36,300 BTC since 2022.

The fear is fueled, among other things, by rumors of a possible bankruptcy, which seems increasingly logical in view of the rapidly shrinking reserves. Of course, that’s just fuel in the fire. This is confirmed by the fact that Huobi’s customer base has also shrunk significantly.

Is the Chinese government investigating Huobi?

Unfortunately, the financial situation is not the only worrying factor. There are also rumors that Chinese authorities are investigating the trading platform. Crypto analyst Adam Cochran reports this based on his own source. A top man within Tron is said to have told him that Huobi’s top is being investigated on suspicion of a crime.

It is not exactly clear why the investigation was launched. It’s no secret that Chinese authorities are cracking down on crypto companies. Finally, cryptocurrency trading is illegal in China. So there is a possibility that the Chinese government suspects Huobi of offering crypto services to the Chinese, which would also be the case with Binance.

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But it could also be something else. Huobi is headquartered in China and most of the top people live in China. It won’t be the first time China has cracked down on a crypto company, in May Chinese police seized a wallet from Multichain.

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