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Huobi has announced plans to list the Paxos-issued PayPal USD (PYUSD) stablecoin shortly after its launch, becoming the first crypto exchange. However, the move comes as the crypto company has seen massive outflows amid rumors about its possible insolvency.
Huobi to Become the First Exchange to List PayPal’s Stablecoin
In a Tuesday announcement, Huobi said it would become the first crypto exchange to list PayPal’s stablecoin PYUSD as soon as it hits the market. The platform would permanently provide PYUSD/USDT trading pairs with zero trading fees.
“When the market circulation and liquidity conditions are ripe, Huobi will open trading at the first time,” the announcement read. “Huobi will be the first exchange to support the launch of PYUSD stablecoin, and will provide PYUSD/USDT trading pairs with 0 trading fee permanently.”
As reported, PayPal announced Monday that it is rolling out its PYUSD stablecoin soon. US dollar deposits, Treasury bills, and similar cash equivalents back the stablecoin. The dollar-pegged asset is issued by Paxos, a blockchain infrastructure firm that used to issue BUSD stablecoin.
PayPal CEO Dan Schulman said the company is looking to reinforce its dominance in digital payments by launching a stablecoin, utilizing the technology that allows instant and low-cost transfers without an intermediary. The company stated that PYUSD is pegged to the US dollar and will become gradually available to more US customers.
Like other well-known stablecoins, PYUSD will be redeemable for US dollars anytime. It can be exchanged for other cryptocurrencies supported by PayPal, which holds around $1 billion in customers’ crypto funds. Consumers can use PYUSD to make purchases, with PayPal also planning to add the stablecoin to its widely-used payments app Venmo.
Huobi Sees Massive Outflow Amid Rumors Around Its Insolvency
Huobi’s plan to list PYUSD comes as the exchange has seen significant outflows of funds and a decline in its total value locked (TVL) amidst rumors of insolvency. According to data from DefiLlama, the exchange saw outflows totaling $64 million between August 5 and 6, causing its TVL to drop to $2.5 billion, down from $3.09 billion on July 6.
The decline came after crypto investigator Adam Cochran pointed out inconsistencies in the exchange’s Tether holdings, suggesting Huobi may be insolvent. In a recent Twitter thread, Cochran noted that Huobi held less than $90 million in assets across USDT and USD Coin (USDC) on August 5.
However, Cochran mentioned that the exchange’s latest “Merkle Tree Audit” claims that Huobi users have $630 million in USDT and a wallet balance of $631 million USDT. The crypto veteran concluded that “Huobi is deeply insolvent.”
16/16
— Adam Cochran (adamscochran.eth) (@adamscochran) August 5, 2023
When Binance heard that Huobi/Tron employees were being investigated in relation to actions at Huobi, they started slamming the 3CRV USDT sell into DAI to mitigate their risk.
Because Huobi is deeply insolvent.
Cochran also alleged that the exchange’s leadership had been arrested in China due to alleged involvement with gambling platforms. He added that at least one C-level executive had left Huobi recently, though it remains uncertain whether this departure is connected to the investigations.
“The source has been verified as a senior executive at Tron who has first-hand knowledge of the investigation and has been at Tron for many years,” Cochran said in response to a tweet from Huobi’s community manager, who dismissed the investigation claims.
“Whether you’ve been informed or not, your colleagues are currently under criminal investigation.”
Meanwhile, Huobi’s native token HT has not reacted heavily to the news. At the time of writing, the token is trading at $2.61, down by around 1% over the past day. HT is down by only 1.8% over the past 14 days.
Do you think Huobi might be insolvent? Let us know in the comments below.