The company’s community manager alleged that cryptocurrency analyst Adam Cochran’s information was just gossip, but Cochran denied these allegations.
Crypto Analyst Adam Cochran’s Observations: Is Huobi Crypto Exchange Bankruptcy?
This past weekend saw a remarkable $64 million in outflows from the Huobi cryptocurrency exchange, continuing a continuous decrease in the total value locked (TVL) on the exchange, which has dropped from $3 billion a month earlier to $2.5 billion. A number of recent statements made by Adam Cochran, a fintech professional, angel investor, and well-known crypto Twitter analyst, about the alleged financial instability of Huobi, sparked questions. Moreover, he stated that the renowned stablecoin Tether (USDT) was being sold in bulk by cryptocurrency powerhouse Binance, which is operating globally.
Cochran Deletes His Tweet
Cochran speculated that selling Tether was possible because of Huobi’s possibly and subsequently added that there had been strange balance shifts at Huobi over the previous month. He even shared a series of posts about it on X. Cochran made a connection between these findings and recent claims that police had questioned Huobi executives and Tron employees, a blockchain platform created by cryptocurrency entrepreneur Justin Sun.
The leaders of the company’s human resources, server operations, product, and chain tech departments were among the individuals Cochran even listed as being detained. The tweet was later removed, though.
I don’t think Binance is selling their Tether for two reasons. They want to topple USDT to push (stablecoins) they can control and gain from, (or) they realize Sun doesn’t have the USDT he claims to and if users find out they might mass dump to escape his exchange.
Cochran
Then Cochran explained how he thought Huobi’s holdings worked.
Across USDT and USDC combined, Huobi only holds $90M of assets. Huobi’s own ‘Merkle Tree Audit’ still lists that Huobi users have $630M of USDT held and a wallet balance of $631M USDT—users think they have balances of $631M in Huobi, but there is only $90M there.
Cochran
Huobi’s Social Media Officer Responds to Cochrane
Cochrane hypothesized that the missing funds are being utilized to boost the yields of Sun-operated DeFi programs like Tron, Poloniex, and others. Even still, it appears that Sun only appears to be responsible for covering around half of Huobi’s overall debt. Following these allegations, the exchange’s head of social media posted a response on X, claiming that the reports of police involvement were untrue and that Huobi’s business operations had continued as usual.
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