The Huobi Token (HT), the native token of the Huobi exchange, suffered a flash crash in the early hours of March 10. The price of HT fell from around $4.70 to below $0.40 within minutes, before recovering to around $3.95.
The crash was attributed to a massive liquidation event that caused a cascade of forced liquidations in spot and contract HT markets. Despite the severity of the crash, Huobi advisor and TRON founder Justin Sun brushed it off as “market behavior.”
Sun reassured users that the exchange and all funds were safe, and that Huobi would fully bear any losses caused by HT market fluctuations. He also revealed that a liquidity fund of $100 million would be invested to improve the liquidity depth on the exchange.
However, Sun’s actions have come under scrutiny, as blockchain sleuths have discovered that he withdrew $80 million in stablecoins from Huobi on March 9.
The funds were comprised of $40 million in USDT, $20 million in USDC, and $20 million in USDD, TRON’s native stablecoin. $60 million of them were deposited in Sun’s own DeFi platform, JustLend and Aave.
The flash crash of HT has raised questions about the safety and stability of the Huobi exchange, as well as the actions of its advisors.
While Sun has stated that the exchange and its funds are secure, the sudden drop in price and the subsequent withdrawal of stablecoins has caused concern among users.
