Huobi, a major cryptocurrency exchange, faced rumors of insolvency after a sharp drop in Total Value Locked (TVL). Amid investigations by Chinese authorities over its gambling platform associations, concerns grew, but Huobi’s leadership, including Justin Sun, expressed confidence in the exchange’s stability and future growth.
Crypto Twitter was in a frenzy of activity after rumours of TRON founder Justin Sun’s arrest in China started doing rounds. But before panic could fully ensue, Adam Cochran, fintech executive and angel investor, offered some clarity. In a series of tweets, Cochran dismissed these rumours, pointing out that they revolve around employees from Huobi and Tron, who are under investigation for alleged money laundering — not Sun or TRON’s blockchain itself.
Huobi’s Solvency Crisis?
Even as one fire was being doused, another was being lit. Huobi, a leading cryptocurrency exchange, is facing rumours of insolvency. The exchange’s Total Value Locked (TVL) experienced a sharp fall from $3.09 billion to $2.5 billion, triggering an outflow of funds amid concerns about its financial stability.
The exchange is reportedly under investigation by Chinese authorities over its association with gambling platforms, which could be causing further consternation amongst investors.
Adding fuel to the fire, Cochran noted discrepancies in Huobi’s Tether (USDT) holdings. He raised concerns about Huobi’s financial stability, suggesting that the exchange may not have enough funds to cover its obligations. Huobi claimed to hold $630 million in USDT, but according to Cochran, on-chain data pointed to assets of less than $90 million.
Also Read – Is Huobi Exchange Insolvent? TVL Crashes to $2.5B as Chinese Authorities Start Investigation
Sun Shines Light on Huobi’s Rumours
As whispers of Huobi’s insolvency gained momentum, Justin Sun entered the chat. Sun, who also heads the Huobi exchange, took to Twitter to allay the fears. He urged his followers to “Ignore FUD, keep building!” and expressed confidence in the continued development and future success of TRON and Huobi.
Sun’s message was clear: TRON and Huobi are here to stay, and they will thrive through continuous development. His stance was further supported by Huobi’s head of social media, who dismissed the rumours and assured that the exchange is “currently doing well”.
The Crypto Climate in China
China’s stern stance towards cryptocurrency exchanges has put Huobi in a challenging spot, with ongoing speculations about its executives being investigated and the fears of possible insolvency. Huobi, however, has been proactive in following crypto-friendly developments in Hong Kong, which recently introduced a regulatory framework for crypto companies. Earlier this year, Huobi even applied for a crypto trading licence in the region.
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