Huobi - the new trouble spot of the crypto world ?

[Wend]

If your friend is leaving assets on centralized exchanges, you should try to explain to him or else the consequences will be very unpredictable. Of course I agree with you on the point of not storing bitcoins or crypto assets on centralized exchanges, because that's not where we store our assets. But we also can't get rid of them completely, I mean we should use them for the right purpose. It is for trading and exchange, not a place to store long-term assets.

I would in a way understand that the very first investors that lost their money because of centralized exchanges were kind of naive and did not expected this to happen, but we have seen exchanges collapsing and taking their clients with them several times and the same is true for failed projects and coins, so how many times people need to watch the same events before they know how everything ends? At this point besides bitcoin and maybe ethereum no other coin should be trusted at all as the risk those altcoins collapse out of nowhere is simply too high.

There is no doubt when you say that bitcoin and ethereum are the most reliable coins on the market. But that's not why we just focus on them and ignore the bigger opportunities. Agree with you that all altcoins are very risky but the higher the risk, the higher the return. If you are a risk averse, you should stay away from them, but for those who like to take risks, why pass up when we have a chance to get big profits?

I am not a bitcoin maximalist, nor do I want to be too rigid to lose other opportunities, I am willing to take risks for greater rewards. But this is not investment advice for anyone, altcoins are very risky.

[Lucius]

When I see the words "China, USDT, Tron, Justin Sun" in a post, I can only say that all this can only turn out to be a mess, although not something of the magnitude as with De Kwon or FTX. Some would certainly like this to be one big negative news that would drop the price of BTC by 20-30%, but I don't think that Huobi is something that has a big impact, and I don't think that USDT is something that can collapse just like that, except in case that the US and some other powerful governments get involved.

~snip~
The community should learn from this and stop supporting scammers and looking to finance new pump and dump ponzi schemes

People simply do not care what it is about as long as there is a chance to make a profit, and considering that investing in BTC is no longer as profitable as before, there is no need to doubt that support for various crypto projects will continue. Millions of naive and gullible seekers of easy money dig for some digital gold every day in front of their small screens, and that's exactly what makes people like Justin Sun rich.

[DrBeer]

Some interesting information about what happened and the nature of the problem:

Cryptocurrency exchange Huobi faced a major outflow from August 5 to 6 due to rumors of alleged bankruptcy, causing its TVL to drop by nearly $54 million.
Cryptocurrency analyst Adam Cochran published a post on X (formerly Twitter), which he later deleted. He claimed that some members of Huobi and Tron's management team had been questioned by Chinese police.
Cochran even published a list of names of people who may have been arrested.
Having conducted his own audit of the exchange, the expert came to the conclusion that the balance sheets of users total about $630 million. At the same time, he estimated the platform's reserves at only $90 million.
The missing funds, as Cochran suggested, are used to support the profitability of Tron, Poloniex and other DeFi applications, which are controlled by Justin Sun.

https://forklog.com/news/huobi-stolknulas-s-ottokom-sredstv-na-fone-sluhov-o-neplatezhesposobnosti

That is, not only the use of funds for personal enrichment, but also the misuse of funds to finance and support other projects of his own

[Saint-loup]

Have you any news about Huobi DrBeer ? Because one month after those worrying claims everything seems to still work as usual at this exchange. I've made several withdrawals last week, and they've been executed quickly and smoothly. So I guess Huobi has finally managed to overcome those alleged issues. Being one of the last big non-KYC exchange save them from any critical liquidity issues for quite a while IMO. I'm waiting impatiently for their next audit though.

[DavideBaldini]

-Binance has started a massive sell-off of USDT.

How do you know about this, or where do I check this information?

All their audits for the past months show constant Tether reserves at about $18 billion.

https://www.binance.com/en/proof-of-reserves

[Saint-loup]

Talking about audit and proof of reserves, the last audit from Huobi is dated from the first day of August, so it's not accurate to claim the 6th August that the balance has dropped from $700 to $90 million in a month and the Merkle Huobi tree hasn't been updated in a month. Personally, I don't understand and believe how $600 million USD can disappear in a couple of days. I hope they will publish a new audit soon though.


https://www.huobi.com/en-us/finance/merkle/

-Huobi's balance dropped from $700 to $90 million in a month. -The Merkle Huobi tree (a balance sheet publication introduced after the FTX crash) hasn't been updated in a month.