Huobi Witnesses Massive Outflows on Rumors on Crackdown and Insolvency
- Huobi, a crypto exchange, witnessed outflows totaling $64 million on August 5 and 6.
- Total value locked (TVL) on the exchange has dropped to $2.5 billion.
- The leadership of the exchange was said to have been detained in China on August 4.
Huobi, a crypto exchange, witnessed outflows totaling $64 million on August 5 and 6 as concerns about the company’s viability and reports that Chinese authorities were investigating its management persisted. Total value locked (TVL) on the exchange has dropped to $2.5 billion as of this writing from $3.09 billion on July 6 due to recent outflows.
The leadership of the exchange was said to have been detained in China on August 4 in connection with an inquiry into the exchange’s ties to gambling sites. A representative from Huobi dismissed the allegations as “fake news.” Authorities in mainland China are purportedly stepping up their oversight of crypto exchanges, prompting rumors.
The exchange reportedly has solvency problems as well. Fintech exec and angel investor Adam Cochran warned in a series of articles that the company may be bankrupt because of discrepancies in its Tether holdings.
Cochran said that on August 5, Huobi had less than $90 million in assets, including USDT and USDC. This was supported by on-chain statistics from DeFiLlama. However, according to the current ‘Merkle Tree Audit,’ “Huobi users have $630M in USDT held and a wallet balance of $631M USDT.”
In Cochran’s opinion, “Huobi is deeply insolvent.” On August 6th, Huobi wallets contained a total of $72 million in USDT and USDC, according to statistics provided by DefiLlama.
In addition to problems in China, Huobi has to deal with issues in other countries. The exchange was forced to shut down in May when the Malaysian securities regulator took enforcement action against it.
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