- On-chain data showed ~$60 million in stablecoins taken off Huobi around when HT Token lost 93% of its value.
- Justin Sun has defended his withdrawal from Huobi and also added funds back.
- Some are skeptical of the withdrawal on Twitter, while others believe it is simply bad timing.
A sudden flash crash of Huobi’s HT token, the native token of the exchange, on Thursday, March 9, sent shockwaves around the crypto space–especially with recent crypto company collapses fresh in mind.
Around the time of the collapse, Justin Sun withdrew ~$60 million in Ethereum stablecoins from Huobi. The funds were moved to DeFi protocol Aave.
While the moving of funds by Sun may seem suspicious–especially considering Sun’s close affiliation with Huobi–the Huobi Global advisor took to Twitter to explain the movement of the Stablecoins.
“It is just normal practice of fund deployment,” Sun said underneath a screenshot of on-chain data showing four large transactions amounting near $60 million.
Additionally, the withdrawal of funds was not in response to the flash crash of HT Token. Instead, it came hours before Sun Tweeted an apology for the crash, which he attributed to “The impact of the leveraged liquidation on the market caused by a few users.”
Evidentially, the $60 million withdrawal may not have any dubious intentions or be tied to the HT Token flash crash, but Sun remains a controversial figure who many view with suspicion.
A Suspicious Market
Sun’s crypto controversies came as early as September 2017 when he was allegedly tipped off by Binance CEO Changpeng ‘CZ’ Zhao about a Chinese ICO ban, he wrapped up the TRX ICO a day before China slammed the gate on ICOs.
In a damming report from the Verge, he has been accused of insider trading with his team buying up TRX to pump the price. There are also allegations of securities fraud where he spun that the BTT token was a utility token, not a security, despite his chief compliance officer BitTorrent stating otherwise.
Sun has dismissed all these allegations, but this latest suspicious or ill-timed move has also set off alarm bells across Crypto Twitter.
Business Development and Marketing Executive Adam Cochran fueled the fire when he tweeted.
Having seen Terra’s stablecoin unpeg and crash in price, as well as the collapse of Voyager, FTX, and Silvergate, it is unsurprising that the crypto market would be suspicious and on high alert.
On the Flipside
- While Sun removed funds before the flash crash, he has since bolstered Huobi’s liquidity by sending $100 million to the exchange as a liquidity fund to protect against steep drops of the HT token.
Why You Should Care
While there is no evidence to suggest Sun is acting unusually with the $60 million withdrawal, Sun’s reputation, coupled with calamities like a flash crash by Huobi’s exchange token, does not bode well for crypto sentiment.
Read more about Justin Sun and his rise to prominence here: Justin Sun:
From Ripple Employee to Tron Founder.
Read more about how the CFTC and the SEC disagree about classifying crypto coins:
CFTC Opposes SEC’s Crypto Position: Calls ETH and Stablecoins Commodities.
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