Cryptocurrency exchange Huobi has reported outflows worth $64 million between Aug. 5-6, amidst ongoing speculation about its solvency and that Chinese authorities may be investigating its executives. Outflows over the weekend resulted in the exchange’s total value locked (TVL) slipping to $2.5 billion at the time of writing, down from $3.09 on July 6. Rumors surfaced of the exchange’s leadership allegedly being arrested in China on Aug. 4, amidst investigations about dealings with gambling platforms. Speaking to Cointelegraph, a Huobi spokesperson labeled the claims false allegations.
Chinese authorities have reportedly tightened their measures on cryptocurrency exchanges operating within the mainland. Sources with knowledge of the investigation allegedly confirmed at least one C-level executive departing Huobi in the weeks succeeding the rumors – however, it is uncertain if this change is linked to the investigations or not. A senior executive at Tron stated on social media platform X (formerly Twitter) that the Huobi rumors are untruthful and that the exchange is “currently doing well.”
Analyses of on-chain data performed by DefilLama point to Huobi’s wallets holding a combined value of only $72 million in USDT and USDC as of August 6th. To add to this, a Fintech executive and angel investor, Adam Cochran speculated on financial inconsistencies concerning their Tether USDT holdings leading to a possible breach of solvency. Coinciding on-chain audits performed by Huobi reflecting over $630 million USDT stored in custodied wallets.
The investors’ skepticism did not reconcile with Huobi’s slow response– leaving people intrigued. Meanwhile, the exchange underwent advisements and enforcement action imposed by the Malaysian Securities regulators, consequently leading them to shut down their Malaysian operations in May.
A necessary course of precaution for those looking to explore their trust with exchanging crypto, an article with Cointelegraph asks us a very pertinent question: What do
