YEREVAN (CoinChapter.com) – 2022 has seen more than its share of implosions, from Terra to FTX. However, the contagion could spread to 2023, as Huobi, an exchange with over $400 million in daily transaction volume, threatens to tumble. Is chief executive Justin Sun to blame?
Justin Sun Rug-Pulled His Employees?
Justin Sun, the founder of the layer-one platform Tron, acquired the Huobi exchange in Oct 2022. Meanwhile, 2023 started with suspicions that Sun plans mass layoff at Huobi, which the CEO denied. Layoffs or not, all is not well in the state of Denmark.
According to numerous tweets, the CEO has shut down internal communication at Huobi. @BitRunX reported several violations in the company. “Sun wants to cancel the main body of the domestic company,” read the tweet, blaming Sun for ignoring labor laws.
The employee originally signed a domestic contract and paid social security. Now the domestic company is canceled, and the domestic company contract is terminated, but the compensation stipulated in the labor law has not been followed.
said @BitRunX.
The allegations quickly spread in the Twitterverse, with many accusing Sun of “saving his own hide” while leaving hundreds of people unemployed.
Huobi seems to be melting down in real-time, possibly along with His Excellency Justin Sun’s fortune… Shut down all intra-employee IMs etc., Maybe fired a bunch of people. Employees are now angry (or Sun is ruggin’).
read the warnings.
According to the latest developments, Huobi execs do, in fact, plan a 20% layoff but deny any insolvency rumors. Representatives assert that Huobi has established a new organizational structure after the new shareholders have taken over, adding that the firm has adjusted the business departments.
Also read: FOMC meeting minutes confirm interest rate hikes in 2023 – more pain for stocks ahead.
Huobi Bankruptcy Ahead?
“Huobi is shutting down” was the main narrative of the sh*tstorm that followed, with tweets urging users to withdraw their funds “IMMEDIATELY.”
Those who have assets on Huobi must withdraw them immediately. Those who do not have assets should uninstall the Huobi app to prevent it from being automatically updated with a version with a Trojan.
read another tweet.
Reporter and crypto investor Mike Alfred also shamed Sun, calling him the “most erratic billionaire” in crypto.
Huobi’s shadow owner is Justin Sun. Justin Sun is perhaps the most erratic billionaire in crypto. Justin has been sending billions of dollars of stablecoins around the space, including in and out of Binance. Something huge is afoot. Withdraw all coins from unregulated exchanges.
tweeted Alfred.
Alfred also tweeted Sun’s algorithmic USDD stablecoin had suffered a de-peg but deleted the post hours later.
2022 has taught many investors the hard way that, more often than not, there’s no smoke without fire.
Is the exchange actually on the verge of collapse? There’s still not enough evidence to support the Huobi bankruptcy claim. However, the memories are still fresh of FTX’s Sam Bankman-Fried assuring his followers that all is well on the exchange and that the collapse rumors are just rumors.
Also read: Five commandments that crypto investors learned in 2022.
Sun Denies Huobi Collapse Rumors
Unsurprisingly, Sun denied all the rumors of Huobi facing bankruptcy and his trying to rug-pull his own employees. On Jan 6, the CEO posted a lengthy thread with generic phrases like “ignore the FUD and keep building”.
First, it’s important to recognize that the world of crypto can be volatile and uncertain at times. There will always be ups and downs, and it’s easy to get caught up in the fear, uncertainty, and doubt (FUD) that can come with it.
said Sun, not really giving off any concrete information.
Sun also asserted that Huobi would continue “building” “by staying true to their mission, investing in technology and security, listening to our users.” The CEO claimed that his and the exchange’s mission is to “provide a trusted and reliable platform for our users to buy, sell, and trade cryptocurrency.”
Again, with the absence of any concrete information, the tweet rang a bit hollow. One follower suggested Sun could “market buy $50 million TRX before midnight” if he wants to inspire any trust.
The suggestion could be on point, as Tron token TRX price dropped over 10% since the FUD started on Jan 4-5.
