Over the weekend, Huobi Customers withdrew $64 million from the cryptocurrency exchange due to reports that the company’s management had been arrested in China. Moreover, Angel Investors have raised concerns about inconsistencies in Huobi’s reserves.
The Chinese authorities are looking into the matter and the total locked value (TVL) of the exchange has decreased from $3.09 to $2.5 billion in the last month. This followed on August 4 after reports of Chinese Authorities detaining Huobi’s top executives in relation to an investigation into the exchange’s ties to betting websites.
Adam Cochran, an angel investor and fintech executive, has specifically pointed to some inconsistencies in the exchange’s Tether (USDT) balances. He claims that Huobi’s customers believe they have balances of $631 million, but the exchange only has $90 million.
In response to these allegations, Huobi’s social media manager refuted them and stated that the exchange is “currently doing well.” Huobi also tweeted that the spread of FUD has caused people to become concerned in the last two days and that the company wants to reply in the open with honesty and clarity.
The rules governing crypto trading platforms appear to be becoming stricter in China, and uncertainty exists regarding whether the recent resignation of one of the exchange’s senior executives was related to the ongoing investigations in China. Huobi’s most recent “Merkle Tree Audit” On-chain data indicates that the exchange might not be in a position to pay off its debts.
