Analyst Adam Cochran has raised concerns about the financial soundness of crypto exchange Huobi, pointing out potential inconsistencies in its Tether (USDT) assets. Cochran’s review of Huobi‘s “Merkle Tree Audit” reveals a stark contrast between the reported $90 million in Huobi‘s accounts and the $631 million worth of USDT believed to be held by its users. Adding to the concern, the Merkle Tree Audit hasn’t been updated recently.
Cochran speculates that the USDT asset discrepancy could be tied to Justin Sun, a renowned name in the crypto domain and the brains behind the Tron network. Sun faces accusations of utilizing Huobi user assets to bolster his decentralized finance (DeFi) ventures, artificially enhancing returns to draw more deposits into Huobi.
Read more about Justin Sun and Huobi.
Moreover, Cochran also proposes that crypto exchange Binance might be offloading its Tether in a strategic attempt against Huobi. Cochran theorizes that Binance aims to undermine USDT’s influence by endorsing other stablecoins that offer them both control and profit. Another perspective he offers is Binance‘s potential awareness of Sun’s exaggerated USDT holdings, prompting a defensive stance against a possible large-scale sell-off by Huobi patrons. The funds and financial commitments on Huobi‘s end seem mismatched. Even when considering the funds Sun may have shifted from Huobi to his DeFi platforms, it appears only half of Huobi’s total obligations are covered.
Cochran criticizes Justin Sun for apparently using Huobi as his “personal financial reservoir.”
Lastly, Cochran theorizes that Binance‘s assertive USDT disposition could be a precautionary approach, given whispers of a probe into Huobi and Tron staff. These speculations cast doubts on Huobi’s fiscal stability, amplifying chatter about the firm’s potential financial woes.
