Jan 9, 2023 at 04:20Crypto exchange with Chinese roots Huobi has confirmed that it is going to lay off about 20% of its staff as part of the company’s restructuring. Before that, the exchange denied any impending layoffs. In addition, real FUD is raging around this fourth-largest crypto exchange on Twitter. We collected the most relevant at the moment.
What’s going on?
Right now, there is some kind of panic going on around Huobi.
Huobi is cutting its personnel by 20%, the value of USDD from Tron can’t restore parity with the dollar (and nobody seems to care), and all exchange-linked assets (HT and TRX) are experiencing the highest volatility. All three assets (USDD, TRX, and HT) belong to either Huobi or its affiliate project Tron:
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Although Justin Sun (shadow owner of Huobi Global) assures everyone that the funds are safe, many are scared of a situation similar to the recent crashes of 3AC, FTX, and Alameda. Users of the exchange continue to withdraw money in masses; for the last 24 hours, about $90 million have been withdrawn from Huobi.
Popular Twitter user @VivaLaCoin describes this strange situation this way:
“I dont use the exchange, but if you have anything on #Huobi, I’d be cautious & remove. NFA, but w/ Justin Sun’s (bought huobi in ’22) $trx falling off a cliff, $Huobi sinking, & $usdd never repegging after the #ftx collapse, there’s significant pressure on the exchange.[sic]”
“After denying layoffs only a few days ago, Sun confirmed today they are laying off 20% of the staff as Sun moves $100mil from his wallet to the exchange amid what seems like a potential run on #Huobi.”
“For those that have been in this market for years, Justin Sun is synonymous w/ an uphill fight to fade irrelevancy, often injecting himself late & loud into every aspect of trends, drama, & conversation.”
Employees of the exchange are forbidden to share any information; at the same time, new strict conditions for contract extensions were introduced:
According to some reports, at least part of the employees responded to these conditions by going on strike:
According to many KOL reports, the content of Huobi is currently in chaos, and more than 1,000 employees have gone on strike. The hidden danger is very serious. Go and withdraw your digital currency.#Huobi pic.twitter.com/dUY5lUxq7p
— DavidNFT (@Gamefi_David) January 5, 2023
Some users report that they cannot withdraw their money from this exchange. It must be admitted that others have no problem with withdrawal, and probably the exchange is overloaded with requests:
I can't withdraw my funds from @HuobiGlobal & support told me everything is fine with my account lol.
Already 1 week I try to cashout my money. 🧐 pic.twitter.com/60TzAGyAWz
— Crypto General 🦄 (@DaCryptoGeneral) January 7, 2023
Justin Sun himself reassures that everything is under control:
In conclusion, at Huobi, our strategy is to "Ignore FUD and Keep Building." By staying true to our mission, investing in technology and security, listening to our users, we're able to provide a trusted and reliable platform for our users to buy, sell, and trade cryptocurrency.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) January 6, 2023
Additional details
Huobi has been hit by a flood of negative messages (FUD) on Twitter. Here are just some of the accusations:
- According to DeFiLlama, the net capital outflow from Huobi in the last 24 hours was $85 million. In the last 7 days, the outflow was $135 million.
- Huobi will cancel all bonuses at the end of the year and plans to lay off up to 600–800 people out of 1,200 (information confirmed).
- Huobi closed internal employee communication groups and feedback channels (information confirmed).
- Justin Sun wants to pay Huobi employees in USDT/USDC instead of fiat (information confirmed) — some employees are against it and risk being fired.
- Some exchange employees report that Sun refuses to pay them at all.
- Information has appeared about the compromise of Huobi’s security systems.
- Individual users are reporting that Justin Sun is storing fiat at Silvergate Bank, which is experiencing problems.
While there is panic in the market and reports from individual users require further confirmation, there is no doubt that the Huobi exchange is under pressure due to the outflow of funds.
Whether it will be able to survive this stress test, time will show, but at the moment, the exchange has not lost the critical volume of liquidity. Nevertheless, note that Huobi has a rather dangerous coverage of its assets with its own token HT (as FTX did), which, in case of a prolonged attack, could lead to a sudden bankruptcy:
43% of Huobis reserves are made up of its own token (coingecko)
With more FUD happening, can Huobi be the next #ftx ??
Lets discuss mamaya! pic.twitter.com/DoKpHCIzQU
— Coach Miranda Miner (@MiningMiranda) January 8, 2023
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