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The bear market deepens as negative news and FUD keep popping up. The latest on the list of fear-causing information is Justin Sun’s USDD stablecoin and popular crypto exchange Huobi.
Mike Alfred, an investor serving as a board member of BTC miner Iris Energy and digital asset investment platform Eaglebrook Advisors, earlier today voiced out some warnings on USDD stablecoin and Huobi Exchange.
According to Alfred, Justin Sun shadow owns Huobi, and he is perhaps the “most erratic billionaire in crypto.” Justin has been sending a handful of billions of dollars of stablecoins around the space, including in and out of exchanges such as Binance, said Alfred. Adding, “Something huge is afoot. Withdraw all coins from unregulated exchanges.”
He also went ahead to tackle Justin Sun’s USDD stablecoin saying the algorithmic stablecoin on Tron has de-pegged and could be in the process of collapsing. “It’s code red time in crypto again,” Alfred concluded.
Following the accusations that Justin Sun appears to shadow-own Huobi, rumors of the exchange being insolvent have now begun to spread. When a tweep commented on Alfred’s post saying, “I doubt he is a billionaire.” Alfred replied that Justin cashed out $1.5 billion to fiat in the last couple of months. “He’s looting Huobi before it crashes.”
Is Huobi Really Insolvent?
Several theories have intensified Huobi’s rumor of being insolvent. It was reported yesterday that Huobi had shut down internal employee communication groups and feedback channels and is now asking employees to receive their salaries in stablecoins.
While the validation of the rumor has not been confirmed, and there have been no reports of clogging of withdrawals on Huobi yet, the conclusion of whether the exchange is solvent or not is still quite an uncertain projection.
Amid the ongoing Huobi rumors, the exchange has entered the red in trading volume over the last 24 hours. According to data from Coinmarketcap, Huobi’s 24-hour trading volume is down by over 15%, sitting at $343 billion.
Effect On USDD Stablecoin And The Crypto Market
As of the time of writing, USDD has de-pegged and is now trading at $0.9799 with a trading volume of $33.5 million. The Huobi native token (HT) has also fallen by more than 7% in the past 24 hours, with a trading volume of $20.5 million over the same time period.
There hasn’t been any significant drop in the global crypto market; however, should the rumor about Huobi be true and the exchange eventually crashes, there could be potential drops, particularly in altcoins. Furthermore, both Bitcoin and Ethereum seem to be in a consolidation state, almost as if they are waiting for significant news before they begin to move.
Featured image from iStock, the chart from TradingView