protos.com
Justin Sun-owned $HTX revealed in its most recent proof-of-reserves, dated June 1, that it’s moved $1.3 billion worth of its reserves to a new category that it refers to as “ThirdParty.”
This has affected multiple important assets for the exchange, including bitcoin ($BTC), ether ($ETH), $USDC, Usual Stablecoin (U), and Tether ($USDT).
These balances have apparently been moved to a new custodian, as the $HTX website now notes, “The assets in the Custodial Wallets are maintained by third-party custodians.”
In order to verify these quantities, we’re told to “please directly contact the third-party custodians.”
Unfortunately, $HTX hasn’t publicly disclosed who those custodians are.
Protos reached out to $HTX for clarification on who or what ThirdParty is, but $HTX has yet to provide an explanation.
Bitcoin on $HTX
Currently, the $HTX proof-of-reserves claims that $HTX has 20,922.77 $BTC on the exchange.
Of these, only 8,691.6, or 41.5%, are native $BTC on the Bitcoin blockchain.
Far larger than that are the 10,422.9, or 49.8%, which are tokenized $BTC issued on the Sun-founded TRON blockchain.
Poloniex proof-of-reserves and WBTC backing missing
This product isn’t related to Sun-advised Wrapped Bitcoin but is a far less publicized tokenized $BTC product issued by Sun-owned Poloniex.
Troublingly, Poloniex refuses to disclose where the collateral for this tokenized $BTC product are held.
Even more troublingly, the circulating supply for this token is greater than the total amount of $BTC disclosed in the Poloniex proof-of-reserves.
In addition to these two large categories, there’s a small amount of $BTC lent on Sun-founded JustLend.
Finally, there are the 1,719 $BTC, representing 8% of the total user $BTC, which have been moved to this undisclosed ThirdParty.
Ether on $HTX
The $HTX proof-of-reserves currently claims that there are 109,573 $ETH on $HTX.
However, a shockingly small amount, 4,006 or a mere 3.7%, are native $ETH on the Ethereum blockchain held by $HTX.
A much larger portion, 29,051 or 26.5% worth is staked ether (stETH).
However, by far the largest segment for this asset, 76,515 $ETH, or 70% of the total, has been transferred away from $HTX and into the hands of an undisclosed custodian.
Usual on $HTX
$HTX currently claims to have $38,446,011 worth of the U stablecoin.
Most of this is in the “native” forms, predominantly on the TRON blockchain, but also on $BNB Chain.
However, 46% has been moved to ThirdParty.
$USDC on $HTX
Circle-issued $USDC is one of the assets that has almost entirely been moved to ThirdParty.
Currently, $HTX claims to have $238,931,193 worth of $USDC on the exchange.
However, a truly mind-boggling $237,470,509, or more than 99% has been moved.
$USDT on $HTX
The $USDT reserves on $HTX are similarly strange.
There is $906,548,772 worth of claimed $USDT in the $HTX reserves.
This includes a certain amount of native $USDT, on Avalanche, Ethereum, and TRON, totaling less than 1% of the total reserves.
Additionally, there’s approximately $10 million worth of $USDT on $BNB Chain, no longer an official Tether-issued chain.
On-chain data shows Justin Sun controls virtually all stUSDT
Also, there’s approximately $39 million in $USDT in staked tether, which was previously invested in United States Treasuries but is now lent through Aave.
Also lent on Aave is the $1.4 million aEthUSDT included in this calculation of the reserves.
We also mustn’t forget to mention that a portion of these reserves — approximately $17 million — are also lent on Sun-founded JustLent.
Finally, the largest portion of these reserves, approximately $819 million, has been moved to ThirdParty.
$HTX’s many problems
These changes have only compounded existing troubling problems in the $HTX reserves.
They include the fact that a portion of the TRX token on exchange is also lent on JustLend.
Not to mention the fact that World Liberty Financial has recently chosen to blacklist addresses related to $HTX.
‘Someone’ is taking advantage of $HTX’s reserves
Besides these problems, the United Kingdom recently sanctioned $HTX for helping to provide financial services to key industries in Russia.
Which of these problems is the most troubling we will leave as an exercise to the reader and the remaining $HTX users.