Crypto exchange Huobi has contacted multiple data platforms to update its cryptocurrency holdings, following market talk that the exchange might face an insolvency issue around Tron blockchain’s stUSDT project.
See related article: Huobi sees US$105 million outflow amid insolvency rumors
Fast facts
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Market talk of Huobi’s insolvency began when crypto analyst Adam Cochran said on August 6 that a large proportion of the USDTs staked by users in the stUSDT project went to addresses held by Justin Sun – the founder of Tron as well as an advisor and stakeholder at Huobi – to finance other decentralized finance protocols. Cochran also highlighted a continuous USDT outflow from Huobi and a US$500 million discrepancy in redemptions from Huobi addresses on Tron, which could result in an insolvency issue if users withdraw USDTs in bulk.
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Tron in July launched stUSDT, “world’s first real-world asset product,” to allow investors to stake their USDTs to earn yield from real-world assets such as bonds. Huobi allows its users to invest in stUSDT.
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In response to market talk of insolvency, Huobi’s Head of Social Media Xie Jiayin said in a Tuesday blog that some blockchain data platforms did not fully display Huobi’s assets and addresses, and the company had been actively contacting these platforms to update the information.
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“Regarding the withdrawals, we still ensured uninterrupted withdrawal operations by guaranteeing a 100% reserve and maintaining asset security,” Huobi’s PR team said in an email reply on Thursday.
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Huobi also told Forkast it has sent the company’s bank statement as a proof of reserve to crypto media outlet Wu blockchain, which reported on Thursday Huobi had purchased about US$500 million of liquid assets as of Aug. 6.
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“The current data (regarding Huobi’s stablecoin holdings) can mainly be viewed on Nansen and DefiLlama,” said Huobi’s Xie on Tuesday, who added that Huobi’s Merkle Tree Audit as of Aug. 1 will be released this week with data about stUSDT.
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DefiLlama data shows Huobi had about US$400 million in stUSDT and US$273 million in USDT as of Aug. 11. DefiLlama began to display stUSDT data on Tuesday.
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Prior to the update, Huobi’s USDT balance stood at only around US$90 when Cochran published his Huobi insolvency claims on Aug. 6 and noted Huobi’s Merkle Tree Audit showed a USDT balance of US$631 million on July 1. DefiLlama’s data also showed Huobi held about US$583 million in USDT at that time. Two days after Cochran’s Twitter posts, Huobi received 200 million USDTs from an address reportedly related to Justin, according to crypto data tracker PeckShield Alert.
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