Rumors can
act as a dangerous weapon, triggering panic and leading to capital flight. The
cryptocurrency exchange Huobi learned this the hard way, losing $500 million due
to gossip that its leadership had been arrested in China and that the platform
was on the verge of bankruptcy.
Initial
reports of Huobi’s troubles emerged on 4 August after the initial news that
representatives from the exchange had been arrested in China in relation to
investigations involving ties to gambling platforms. On Twitter, Huobi’s
spokesperson stated that rumors regarding the arrest of high-ranking exchange
representatives were false.
The source has been verified as a senior executive at Tron who has first hand knowledge of the investigation and has been at Tron for many years.
Whether you’ve been informed or not, your colleagues are currently under criminal investigation.
— Adam Cochran (adamscochran.eth) (@adamscochran) August 6, 2023
However, in
the meantime, there were also talks about the platform’s solvency issues, which
were reportedly related to the devaluation of the stablecoin Tether (USDT).
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So why is Tether selling off?
Likely Huobi insolvency.
-Binance started selling off USDT in bulk.
-We found out that Huobi execs (and Tron personnel…
