Bitrun, a Twitter user who reveals Huobi-related material on January 6, tweeted once more revealing the troubles hitting the entity. In the previous 24 hours, Bitrun recorded a net outflow of $81 million from Huobi. However, in the last 10 hours, only $50 million are out. Huobi is in trouble, in contrast to FTX’s implosion with a 30% withdrawal of capital, according to Bitrun.
Huobi started laying off people earlier and fully shut off internal communication lines. Investors left Huobi Exchange Money as soon as word got out that workers were going on strike.
Today, Sun Lihuobi shut down the communication group with internal employees and stopped all avenues of contact and feedback with workers. This is an extremely risky situation, and it cannot be ruled out that staff inside the company would revolt and steal user assets directly, or that programmers might introduce backdoor Trojan horses. During the course of the last year, such instances have happened on a number of different exchanges according to BitRun.
— BitRun (@BitRunX) January 5, 2023
Those who have assets stored on Huobi are advised to rapidly remove them, while those who do not have assets should delete the Huobi app. This will stop the Huobi app from automatically updating to a version that BitRun says has a Trojan horse.
Huobi has $694 million in stablecoins right now, but more than $60 million, or 8% of its total, has been taken out in net withdrawals over the past week. This is according to the blockchain data analytics platform Nansen.
Where did the panic begin?
Huobi’s troubles could be getting worse, amid the recent reports making rounds in media outlets.
#Huobi seems to be melting down in real time, possibly along with His Excellency #JustinSun's fortune…
Shut down all intra-employee IMs etc, maybe fired a bunch of people. Employees now angry (or Sun is ruggin') @HuobiGlobal @justinsuntron https://t.co/0PGGHKtX8D pic.twitter.com/VioEzdRwVo
— ⚯ M Cryptadamus ⚯ | @firstname.lastname@example.org (@Cryptadamist) January 5, 2023
However, when bitcoin quant trading platform Pionex declared on January 5 that it had removed all market-making assets from the Huobi aggregators for fund protection, panic first broke out around Huobi.
“By enlisting other market makers to enhance our business model and API structure, we are lessening our reliance on Binance and Huobi,” according to Pionex Global Ambassador Ye Xiaowei.
Users were very critical of Huobi on its official channel, but Justin Sun, who just joined Huobi’s advisory board, didn’t respond at the time.