In a recent series of tweets, Adam Cochran, a well-known analyst in the crypto community and angel investor, has raised serious concerns about the solvency of Huobi, the world’s 12th largest crypto exchange by spot volume. This comes in the wake of reports that several executives from Huobi and Tron have been taken into custody by Chinese authorities for investigation.
Cochran’s claims are based on a detailed analysis of Huobi’s balance sheets and the recent activities of Justin Sun, the founder of Tron. He alleges that Sun has been using the exchange as a personal piggy bank, diverting funds to his other DeFi projects, and leaving the exchange with insufficient assets to meet its obligations.
“So users think they have balances of $631M in Huobi, but there is only $90M there. The rest Justin Sun is using to prop up his other defi apps, and paying a yield on it to get users to deposit more,” Cochran tweeted.
Huobi’s Crypto Balance Sheets Under Scrutiny
Cochran pointed out that the exchange’s own “Merkle Tree Audit” still lists that Huobi users have $630M of USDT held and a wallet balance of $631M USDT, despite the fact that the exchange only holds $90M of assets. This discrepancy, he suggests, is a clear sign of insolvency.
Adding to the complexity of the situation, Cochran noted a significant sell-off of Tether (USDT) on…
