• Written by: Prasanna
  • Sat, 07 Jan 2023
  •   Germany

Is Crypto exchange Huobi on the verge of insolvency? Let's take a look at it in more detail.

Is Crypto Exchange Huobi on the Verge of Insolvency?

The rumor mill starts up again shortly after the New Year. According to some insiders, the next crypto exchange could be busted. This time, it’s Huobi. Is Crypto exchange Huobi on the verge of insolvency? Let’s take a look at it in more detail.

What is Huobi?

Huobi is a cryptocurrency exchange where users can buy and sell digital currencies. The company was established in 2013 and is based in Singapore. Huobi is one of the world’s largest cryptocurrency exchanges, offering a wide range of trading pairs for various cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and many others. The platform is available in several countries around the world, including China, Japan, and the United States.

Why could Huobi be insolvent?

The cryptocurrency exchange announced today that it intends to lay off 20% of its workforce. This will happen as part of the post-Justin Sun restructuring. “The planned layoff rate is 20%,” a spokesman said. He was vague about the 40% prediction and stressed that it was just a rumor. We won’t know how many employees will be laid off until the next few weeks.

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A tweet from the user “Cryptadamist” adds to the embers by specifying that all employee chats have been forced to close and communication is no longer possible. In conclusion, he stated that there can only be two possibilities:

  • Either a large number of employees are laid off 
  • or Justin Sun pulls a rug.
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Justin Sun withdrew 62 million USDT and 60 million USDC from Justlend yesterday. Moreover, he utilized Binance to turn 100 million TRC20 USDT into ERC20 USDT and USDC. Sun may implement such strategies in response to Huobi’s recent large asset outflow.

Now, to appease employees, Huobi quickly announced the replacement of the head of HR with Ryan Wang, an old company employee, and stated that some employees would be promoted and raised.

Previously, on January 3, there were reports that Sun had shifted Huobi employee salaries from being paid in fiat to being paid in either Tether USD or Tor USD Coin. 

What should you do in such a case?

The haunting alert compelled one Twitter user to proclaim that Huobi appears to be collapsing in real-time,” while others recommended users withdraw cash from the exchange due to the speculations.

Although these are only rumors, for the time being, caution must be taken. Because previous incidents, such as FTX, showed the importance of taking accusations seriously. That would indicate that all customer funds should be withdrawn from Huobi and transferred to another exchange or wallet. It should be stressed that it is always preferable to act quickly before it is too late.