*warning* Huobi insolvency rumours

[pawel7777]

Credit to Tytanowy Janusz for posting this on our local board.

If you hold any funds on Huobi, you may want to consider withdrawing asap.

As reported by Adam Cochran on his twitter: https://twitter.com/adamscochran/status/1687959096316542976, looks like Huobi might only hold a fraction of the reserves declared in the "Merkle Tree Audit", which they stopped updating last month.

We have some fresh press hits already:
https://cointelegraph.com/news/huobi-tvl-drops-amid-rumors-insolvency-investigations-china
https://decrypt.co/151535/huobi-insolvency-police-rumors-adam-cochran-justin-sun
https://ambcrypto.com/unraveling-the-link-between-justin-sun-huobi-usdt/

Huobi's twitter account is active but they didn't bother to address this accusation so far.

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[Faisal2202]

Yeah this news was already shared by drbeer yesterday, he shared some good facts but he at the time said all the things are just factions of information which lacks source links so, he/she apologized to share the links. Here it is:

The waves of problems on Binance have not subsided, as it started with Huobi ...

Unexpected news:
-Huobi top executives and TRON developers arrested in China.

Overall, i think we should not panic and do not recommend others to withdraw there funds until they make some announcements because such panic and quick withdrawals will left that exchange no other choice but bankrupt only. I know it's not an acceptable option for the members who have there funds on that exchange but still i think a little patience is necessary.

Edited: I was at wrong because i thought if we will start to withdraw funds abruptly even in the loss (in trading) we will left the exchange no other option but bankruptcy. But after getting useful replies from some members i can now say other than this, There are many other factors too that we have to consider. And in this condition all members are in favor of withdrawing the funds and it is the best practice.

[pawel7777]

Overall, i think we should not panic and do not recommend others to withdraw there funds until they make some announcements because such panic and quick withdrawals will left that exchange no other choice but bankrupt only. I know it's not an acceptable option for the members who have there funds on that exchange but still i think a little patience is necessary.

Disagree. First of all, nobody should be using centralised exchanges as wallets. But most of all, if you claim that people withdrawing funds will make them go bust, that would mean they've been using fractional reserves banking, which alone would be a good reason the get out of there.
But if the rumours are true, maybe at least some of their customers will manage to escape before it implodes.
And frankly, if you had any funds in there, I don't think you would take your own advice of just sitting and waiting for the announcement, so don't advise that to others.

[rat03gopoh]

JS had dismissed the rumors about the arrest a few hours ago^[1], but then the Huobi team explained further that in fact this exchange was indeed going wrong^[2].
However they were, I recall a storyline how SBF was arrested hours after he said nothing would happen which would end in the company closing^[3].

Overall, i think we should not panic and do not recommend others to withdraw there funds

Withdrawing from a centralized service is always recommended, especially knowing this news.


1. https://twitter.com/justinsuntron/status/1688396464417120256
2. https://twitter.com/adamscochran/status/1688259199757590528
3. https://nypost.com/2022/12/13/sam-bankman-fried-wrongly-predicted-he-wouldnt-be-arrested-hours-before-bust/

[Oshosondy]

Overall, i think we should not panic and do not recommend others to withdraw there funds until they make some announcements because such panic and quick withdrawals will left that exchange no other choice but bankrupt only. I know it's not an acceptable option for the members who have there funds on that exchange but still i think a little patience is necessary.

I do not know how true anything about this is and I do not want to know. I am not trading on Huobi global for now. Another thing is that after warning that people should not leave their coins on exchanges, some will still leave it there. I will advice people like that to withdraw their money immediately. They should always know that if it is not their key it is not their coin. Exchanges are not places to save coins, noncustodial wallet should be used.

[Faisal2202]

I do not know how true anything about this is and I do not want to know. I am not trading on Huobi global for now. Another thing is that after warning that people should not leave their coins on exchanges, some will still leave it there. I will advice people like that to withdraw their money immediately. They should always know that if it is not their key it is not their coin. Exchanges are not places to save coins, noncustodial wallet should be used.

I can not agree more with you I also have no funds on there so If i were in someone's place who's assets will be on that exchange i would also withdraw it immediately because i would never deposit huge amounts in that exchange in the first place. So, having less amount might not impact the liquidity of Houbi that much. But, once i have to withdraw some funds probably it was around $100 so, i asked my foreign friend to receive them for me because i was not able to make an account at the time but unfortunately the logging of that account lost and as my friend have no knowledge of how to get that account back and i was exhausted to teach him so i left it by saying (maybe that friend was not wanna help me) so i left those funds with him in his account. Other than i have no other funds.

This reply is for both pawel7777 and rat03gopoh

[o_e_l_e_o]

It was reported as far back as 2017 that Huobi were using clients' deposit without their knowledge or consent and therefore running a fractional reserve system. I've been warning people on this forum about this for literally years:

Huobi, the same exchange which were found to be running a fractional reserve system?

Huobi and OKCoin have both been caught using users' deposits to invest in various high risk vehicles, meaning that they were no longer holding all the coins required to recover all their deposits, and were therefore fractional reserve

Huobi admitted to being fractional reserve and using customers' money to hand out risky loans and investments for their own profit at their users' risk

The writing has been on the wall for years. Anyone who still had coins on Huobi is just asking to lose them all.

Overall, i think we should not panic and do not recommend others to withdraw there funds until they make some announcements because such panic and quick withdrawals will left that exchange no other choice but bankrupt only.

This is bad advice. The only way that withdrawals lead to bankruptcy is if they are fractional reserve. If they store every deposit in a secure cold wallet like they should, then they will have more than enough coins to process each and every withdraw. Everyone should withdraw all their coins now (or ideally, years ago).

[Little Mouse]

The writing has been on the wall for years.

They never learn until they become the victim. I'm an admin a Bitcoin related group from 2018 if I can remember correctly and I was trying to teach the group member that "Not your keys, not your coins" but only a very few of them took it seriously. After the FTX issue, a lot of people started to believe what I have been saying for years lol.

This is bad advice. The only way that withdrawals lead to bankruptcy is if they are fractional reserve. If they store every deposit in a secure cold wallet like they should, then they will have more than enough coins to process each and every withdraw. Everyone should withdraw all their coins now (or ideally, years ago).

Most of the exchanges are doing this including Binance. There have been some news that Binance was using users fund, can't find the news now.

[The Cryptovator]

Houbi's silence suggests an underlying issue, and if the reports are accurate, we may be facing yet another unfavorable market situation. There's a growing concern that CEX platforms, alongside regulatory challenges from the SEC, could potentially harm the crypto market. While many opt for CEX for various reasons, a scenario where investors suffer losses due to corruption could lead to an exodus from these platforms, resulting in market instability.

[PX-Z]

Overall, i think we should not panic and do not recommend others to withdraw there funds until they make some announcements because such panic and quick withdrawals will left that exchange no other choice but bankrupt only.

Do you want their users becomes like what FTX users? Waiting to get refunded for months already. It's better to be safe than sorry. If most people withdraws, and the exchange go bankrupt, its not their problem already. BS practice and ways to make business is the keys of failing the business.

[NotATether]

Overall, i think we should not panic and do not recommend others to withdraw there funds until they make some announcements because such panic and quick withdrawals will left that exchange no other choice but bankrupt only.

Do you want their users becomes like what FTX users? Waiting to get refunded for months already. It's better to be safe than sorry. If most people withdraws, and the exchange go bankrupt, its not their problem already. BS practice and ways to make business is the keys of failing the business.

I think the better question to ask is, do those Huobi users want to end up like FTX users and have to wait in agony for several months or years before they ever get back at least a fraction of their crypto from lawsuits, if ever?

Better to be safe than sorry. Close all trading positions in Huobi and get out while you can.

[Poker Player]

If I had even just one satoshi there, I would have withdrawn it from Huobi by now.

Normally, when the first rumor of insolvency reaches us, we are only seeing the tip of the iceberg, so it is best to act as soon as possible. This, in addition to the fact that, as has been said, it is not advisable to leave your Bitcoin in centralized exchanges. But if for whatever reason you have the money there (let's imagine that you have an amount with which you trade), better withdraw ASAP and look for a more reliable site to trade.

[o_e_l_e_o]

They never learn until they become the victim.

This is the sad truth. After Voyager collapsed, there were warnings everywhere to withdraw all your coins. And yet loads of people lost everything when Celsius collapsed a week later. And again when BlockFi collapsed. And again when FTX collapsed. And loads of people will still lose everything when Huobi or Kucoin or Binance or whoever collapse next.

Houbi's silence suggests an underlying issue, and if the reports are accurate, we may be facing yet another unfavorable market situation.

Whatever Huobi do or do not say is irrelevant. Every single one of the exchanges I just listed above were tweeting about how everything is FUD and fUnDs ArE sAfU in the days and hours leading up to their collapse. No exchange which is fractional reserve will ever come out and say "Yup, we are fractional reserve", because they know that doing so will trigger a bank run which will collapse them within hours. Ignore what is or is not being said and get your funds in to your own wallet before it is too late.

[Faisal2202]

Do you want their users becomes like what FTX users? Waiting to get refunded,.....

Better to be safe than sorry. Close all trading positions in Huobi and get out while you can.

I can't agree more on this and i do know now that the best practise us to withdraw funds as fast as possible and i should not say that but i was also in confusion that if we all will try to withdraw funds will it not bankrupt it? So i should change the tone back in my post but i made mistake. Thanks dear members for the correction.

[Z-tight]

i was also in confusion that if we all will try to withdraw funds will it not bankrupt it?

An exchange will go bankrupt whether you decide or not to withdraw your money, that is fractional reserve system for you. There is actually no money, and all you have in your "account" is just numbers, if they have used your money to do risky business and lose it, it is obvious that you will be unable to withdraw. People are advised to withdraw their money asap from these platforms because they would be able to process some withdrawals before completely suspending withdrawals due to being insolvent, so some people who get the advice early might be among the lucky ones to withdraw successfully.

There's a growing concern that CEX platforms, alongside regulatory challenges from the SEC, could potentially harm the crypto market. While many opt for CEX for various reasons, a scenario where investors suffer losses due to corruption could lead to an exodus from these platforms, resulting in market instability.

It is not going to harm the BTC network, that is for sure, BTC price may drop, but that is a great opportunity to buy more BTC's for a cheaper price. It is the shitcoins that will be affected the most, so many of them will collapse and fall out of the market, though the good thing about it all is that many people would learn about the importance of self custody.

[virasog]

Do you want their users becomes like what FTX users? Waiting to get refunded,.....

Better to be safe than sorry. Close all trading positions in Huobi and get out while you can.

I can't agree more on this and i do know now that the best practise us to withdraw funds as fast as possible and i should not say that but i was also in confusion that if we all will try to withdraw funds will it not bankrupt it? So i should change the tone back in my post but i made mistake. Thanks dear members for the correction.

If you do not withdraw your funds from the Exchange that has rumors of bankruptcy, then you are doing bad to yourself, as otherwise, people will withdraw their funds and those who are late will be left behind with their funds stuck at the exchange.

Even if you have very few funds in the exchange, you should withdraw them as that is your money and you do not want to throw it away, do you ?

In case, everyone gives a withdraw command, the exchange will surely stop the withdrawals because they do not have the funds to pay to all. That is why they are near to bankruptcy but at least you should give yourself a try and maybe you are the lucky one getting the finds out before the exchanges closes.

[BenCodie]

This post deserves a lot of merit, this is potentially breaking news that could massively effect the short term crypto outlook. Plus, you're potentially saving people from the next rug.

Huobi has been around for years and the effect of it collapsing could make ftx-like waves in the space...unless, another giant gobbles up the balances and takes over the business. It's very possible Binance could do that...if they're even liquid, who knows. Okex, huobi and Binance have always been chummy, so it's not impossible. At this point in time, a government or corporation might even take the business over.

I think the downfall started with Huobi chain. A huge disaster that probably cost the Huobi ecosystem a loss that they could never recover.

Intrigued to see what happens next.

[yhiaali3]

Thank you, actually I saw some of these warnings on Telegram but without any explanation, just warning users to withdraw their money from Huobi but the reasons are not mentioned.

I do not know what happened exactly, but the mere spread of such news will make users start withdrawing their money from the exchange, and this will cause a problem in itself due to the insufficient liquidity in the exchange.

The biggest problem is that they have not yet bothered to post any clarification on Twitter to reassure users, this will definitely cause panic.

I expect that there is an old problem, but they tried to hide the truth from the users, but it is not possible for them to continue to do so, and now the problems that they concealed are surfacing again.

[Z-tight]

The biggest problem is that they have not yet bothered to post any clarification on Twitter to reassure users, this will definitely cause panic.
~~~
I expect that there is an old problem, but they tried to hide the truth from the users, but it is not possible for them to continue to do so, and now the problems that they concealed are surfacing again.

That isn't the biggest problem, the biggest problem is that many people wouldn't withdraw their funds when they have the chance to do so, it happened in all the recent events regarding collapsed exchanges and lending and earning platforms, people do not take these warnings serioulsly until it is too late, and by then withdrawals would have been suspended by the insolvent service.

Centralized exchanges and the people who run them will always hide the truth from their customers, they have to give them the sense of security to make sure that their customer base keeps on growing. I will advice everyone to ignore anything they would post on Twitter, and to withdraw their funds into self custody.

[joniboini]

If I remember correctly, there was a rumor related to Gate insolvency a while back too. Looks like exchanges are more interconnected than one might think since the timing and transactions are quite suspicious. I wonder if new exchanges that come up recently are their shadows in one way or another. I won't be surprised if top exchanges went bankrupt and then some people found funds are transferred to new exchanges. According to the latest news, Justin Sun inject a ton of money into Huobi recently to help solve this issue. Let's see if that will work out or not.

It is interesting to see if any collapse will affect some local exchanges in my region since some of them have connections with overseas exchanges like Binance. Anyway, withdraw your funds asap!