Trouble Continues for Huobi as Dogecoin Developer Issues Warning
- Mishaboar, a well-known developer of Dogecoin asked holders to remove their coins from Huobi.
- This request comes at a time when worries about Huobi’s financial stability are growing.
- This unanticipated development may be traced back to an analysis of the proof-of-reserves theory.
Mishaboar, a well-known developer and supporter of Dogecoin (DOGE), recently made a call for DOGE holders to remove their coins from the renowned cryptocurrency exchange Huobi.
This request comes at a time when worries about Huobi’s financial stability are growing, casting doubt on the usefulness of commonly used notions like proof-of-reserves as a sign of an exchange’s soundness.
This unanticipated development may be traced back to an analysis of the proof-of-reserves theory. Exchanges have often used this approach to reassure their investors and clients about their financial stability.
However, Mishaboar’s warnings have highlighted the limitations of this method. While proof-of-reserves are often cited as an indicator of a cryptocurrency exchange’s soundness, the Dogecoin supporter noted that they may not provide a whole picture of the latter’s liabilities.
Mishaboar’s comment serves as a helpful reminder that, although the proof of reserves notion is an improvement, it should not be used as the only metric to judge an exchange’s financial stability.
Moreover, it is essential to consistently improve and strengthen the procedures that assure the security and integrity of crypto exchanges in a sector that takes pleasure in decentralization, creativity, and disruptive technology.
Adam Cochran, a prominent angel investor, and Fintech executive, was the first to voice concerns about Huobi’s financial health. Differences between Huobi’s on-chain data and the amounts revealed in its “Merkle Tree Audit” for stablecoin Tether (USDT) holdings are at the center of Cochran’s claims.
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