Crisis on major crypto exchange? Researcher sounds the alarm

Several major crypto companies went under last year, including of course FTX. Rumors have been circulating for some time that the situation surrounding the big Huobi is not entirely correct either. According to a well-known researcher, large amounts may be missing from the well-known crypto exchange. Also the situation approx Stablecoins appear to be out of service.

Will Crypto Exchange Huobi Go Bankrupt?

Researcher Adam Cochran revealed earlier this week that Huobi may be struggling financially. Clients have withdrawn the lion’s share of all assets over the past year and this trend has continued in recent weeks. Cochran writes on Twitter that there is a connection between Huobi, Tron (TRX) and USDT.

Huobi’s co-founder is Justin Sun, who we also know from Tron. Sun recently launched a crypto staking service called stUSDT. The USDT tokens managed by this service are sold for US Treasuries, allowing for a 4.29% return on investment. However, according to Cochran, 98% of the money on this platform is owned by Sun and Huobi themselves, rather than outside investors.

Justin Sun’s Strange Attack Protocol

But stUSDT does not send the USDT to a separate address, but to the addresses of the wallet addresses of Huobi, Sun and Justin Sun on Binance. According to the on-chain analyst, the tokens located on Huobi could have multiple owners. Huobi and Sun use USDT to generate income from stUSDT, while customers expect the tokens in Huobi’s wallets to simply be part of the customers.

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In total, stUSDT is said to manage USD 507 million in USDT for clients. But if so, then those tokens would be sent to Tether to sell for “real dollars.” These can then be invested in government bonds at the specified interest rate. This is not the case, however, with the lion’s share going to Huobi and to Sun’s own DeFi platform JustLend. So it looks like Sun may be cheating on customer loans.

How Is Binance involved?

Binance could also be indirectly involved. According to Cochran, Binance often learns very quickly when it comes to risky situations. For example, FTT was quickly sold when FTX encountered problems.

Now it sells USDT on a large scale. Binance probably already has an eye on what is happening, Sun has an account with Binance. Furthermore, Binance was already reluctant to buy Sun’s stake in Huobi earlier this year.

According to Cochran, the exchange decides to sell its own USDT for DAI on DeFi platform Curve. Meanwhile, Huobi himself says there are no problems, but this story could have a different ending.

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