Justin Sun Moves $100M in Stablecoins to Huobi Amid Rush of Withdrawals
Sun’s Huobi exchange has been hit with troubles as of late, including massive withdrawals in the last day and news of staff cuts.
Crypto mogul and Tron founder Justin Sun today moved $100 million of his stablecoins to his crypto exchange Huobi after news dropped that it was cutting staff.
According to blockchain data from Nansen, the cash was withdrawn from Binance and then sent to Huobi, which Sun has a majority stake in.
The money was in the form of USD Coin (USDC) and Tether (USDT). Sun then confirmed to Bloomberg that he moved the “personal funds” because it “shows the confidence to Huobi exchange.”
Nansen’s Martin Lee said on Twitter that the transfer “might be to help with the increased withdrawals or maintain a level of confidence in the exchange.”
Clients have been withdrawing funds in large amounts: Nansen today said that $60.9 million of the $94.2 million in net outflow in the past week occurred in the past 24 hours.
Singapore-based Huobi, the fourth largest digital asset exchange with a 24-hour trading volume of $371 million, has been hit with troubles lately: today Reuters reported that it would lay off 20% of its staff—after Sun denied the rumors.
And last week it was reported by independent crypto journalist Colin Wu that staff salaries were being paid in stablecoins, which led to protests from employees.
Decrypt reached out to Sun and his spokespeople but did not receive a response. Sun and his team have repeatedly said people are spreading FUD (fear, uncertainty and doubt) around the exchange.
“First, it’s important to recognize that the world of crypto can be volatile and uncertain at times. There will always be ups and downs, and it’s easy to get caught up in the fear, uncertainty, and doubt (FUD) that can come with it,” Sun said on Twitter Friday.
Huobi’s “FUD” comes at a time when confidence in digital asset exchanges is shaky: last month, the world’s biggest exchange Binance issued a statement reassuring clients that its finances were in order.
In November, FTX, one of the most popular and well-marketed crypto exchanges, blew-up in a spectacular collapse. The company lost billions of dollars in clients’ funds after it was allegedly mismanaged by “a very small group of grossly inexperienced and unsophisticated individuals,” according to its new CEO John J Ray, who is overseeing the company’s bankruptcy restructuring.
FTX’s troubles started when a selloff in the exchange’s FTT token rocked customer confidence and led clients to rush to take their funds out. This led to a liquidity crunch that forced the company to admit it did not hold one-to-one reserves of client assets, ultimately causing the exchange to disable withdrawals before filing for bankruptcy.
The entire crypto ecosystem—coins, tokens and companies—has been reeling ever since.