coinspress.com
Adam Cochran, a prominent figure in the cryptocurrency community and angel investor, has voiced concerns about the financial stability of Huobi, the 12th largest crypto exchange by spot volume globally.
This comes amidst reports of Chinese authorities detaining executives from Huobi and Tron for investigation.
Cochran’s apprehensions are based on his analysis of Huobi’s financial statements and Justin Sun’s actions. He suggests that Sun has been using the exchange’s resources for personal gain, diverting funds to his DeFi projects and leaving Huobi with insufficient assets to meet its obligations.
Users believe they have around $631 million in Huobi, while only $90 million is available, with Cochran claiming the rest is directed towards Sun’s other DeFi ventures.
Huobi’s “Merkle Tree Audit” lists $630 million USDT held, yet Cochran points out the exchange only holds $90 million in assets, indicating financial instability.
Cochran also notes a Tether (USDT) sell-off on Binance linked to concerns about Huobi’s finances. He raises doubts about “stUSDT,” a Sun-backed variant of USDT supposedly backed by bonds, suggesting it lacks proper backing.
Cochran questions the validity of stUSDT, speculating on Huobi redemptions, which should amount to $500 million if they were legitimate. He claims this hasn’t happened, with funds traced back to Sun, Huobi, or Binance.
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Huobi’s community manager, Xandi, denies wrongdoing, insisting operations are normal. Cochran counters with a source verifying ongoing investigations related to Huobi.
As reported by Chinese media, recent arrests of Huobi, TUSD, and Tron executives have intensified concerns. Allegedly, key personnel from both organizations have been detained, prompting urgent advisories to employees.
Cochran mentions implicated individuals, including Tron’s product head and Huobi’s HR lead, further raising the alarm.