The rumor mill starts up again shortly after the New Year. According to some insiders, the next crypto exchange could be busted. This time, it’s Huobi. Is Crypto exchange Huobi on the verge of insolvency? Let’s take a look at it in more detail.
What is Huobi?
Huobi is a cryptocurrency exchange where users can buy and sell digital currencies. The company was established in 2013 and is based in Singapore. Huobi is one of the world’s largest cryptocurrency exchanges, offering a wide range of trading pairs for various cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and many others. The platform is available in several countries around the world, including China, Japan, and the United States.
Why could Huobi be insolvent?
The cryptocurrency exchange announced today that it intends to lay off 20% of its workforce. This will happen as part of the post-Justin Sun restructuring. “The planned layoff rate is 20%,” a spokesman said. He was vague about the 40% prediction and stressed that it was just a rumor. We won’t know how many employees will be laid off until the next few weeks.
#Huobi seems to be melting down in real time, possibly along with His Excellency #JustinSun's fortune…
Shut down all intra-employee IMs etc, maybe fired a bunch of people. Employees now angry (or Sun is ruggin') @HuobiGlobal @justinsuntron https://t.co/0PGGHKtX8D pic.twitter.com/VioEzdRwVo
A tweet from the user “Cryptadamist” adds to the embers by specifying that all employee chats have been forced to close and communication is no longer possible. In conclusion, he stated that there can only be two possibilities:
Huobi had a net outflow of $85 million over the last 24 hours, taking account for 2.9% of total revealed assets, and a net flow of $135 million over the last 7 days, according to DeFiLlama. As per Huobi’s most recent statement, the number of layoffs is 20% or approximately 300 people.
https://twitter.com/ScopeProtocol/status/1611287459723374592?s=20&t=LryNxBD4pL-9NVA9YisOpA
Justin Sun withdrew 62 million USDT and 60 million USDC from Justlend yesterday. Moreover, he utilized Binance to turn 100 million TRC20 USDT into ERC20 USDT and USDC. Sun may implement such strategies in response to Huobi’s recent large asset outflow.
In order to calm the anger of employees, Huobi urgently announced the replacement of the head of HR with Ryan Wang, an old employee of the company, and said that some employees would be promoted and raised.
Now, to appease employees, Huobi quickly announced the replacement of the head of HR with Ryan Wang, an old company employee, and stated that some employees would be promoted and raised.
Huobi consultant Justin Sun tried to address speculations of alleged insolvency in a Jan. 5 tweet, asserting the exchange’s planning process was “good” and the “security of users’ assets will always be completely protected.” Sun also appeared to abandon speculations of disgruntled people, asserting that Huobi will “completely respect the lawful demands made by local employees.”
Justin Sun's HR is communicating with all Huobi employees to change the salary form from fiat currency to USDT/USDC; employees who cannot accept it may be dismissed. The move sparked protests from some employees. Exclusive https://t.co/QB4sjDyHc7
Previously, on January 3, there were reports that Sun had shifted Huobi employee salaries from being paid in fiat to being paid in either Tether USD or Tor USD Coin.
What should you do in such a case?
The haunting alert compelled one Twitter user to proclaim that Huobi appears to be collapsing in real-time,” while others recommended users withdraw cash from the exchange due to the speculations.
https://twitter.com/magicross7/status/1611187596344033280?s=20&t=AJvDVUD0AnxH_VQDXjgHxg
Although these are only rumors, for the time being, caution must be taken. Because previous incidents, such as FTX, showed the importance of taking accusations seriously. That would indicate that all customer funds should be withdrawn from Huobi and transferred to another exchange or wallet. It should be stressed that it is always preferable to act quickly before it is too late.