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Huobi Outflows Hit $60.9M in 24 hrs, Inner Turmoil Reported at Exchange

Tim Fries

Published: January 6, 2023 10:18 pm

Huobi users withdrew $60.90 million worth of funds in the past 24 hours, according to blockchain analytics firm Nansen. The move marks the latest blow for Huobi, which also announced layoffs for 20% of its workforce today.

Huobi Execs Blocked Communication and Feedback Channels with Employees, Twitter User Claims

Crypto exchange Huobi has seen a sharp surge in net outflows in the past day, blockchain analytics firm Nansen said in a tweet. Nansen says the Huobi saw $94.2 million in net outflows in the past week, $60.9 million of which occurred in the past 24 hours.

Nansen said the most significant outflows were seen in accounts with high balances, mainly withdrawing Ether (ETH), Tether (USDT), and USD Coin (USDC). Other moves also contained Avalanche, BNB Chain, Fantom, and Polygon flows, Nansen added.

Nansen also posted screenshots of a tweet by the crypto account @BitRunX, which explained what may be going on at Huobi. The Twitter user said Huobi “has closed the communication group with internal employees today and blocked all communication and feedback channels with employees.”

“This is very dangerous, and it is not ruled out that internal employees rebel and directly rug away user assets or programmers add backdoor Trojan horses. Such incidents have occurred on multiple exchanges in the past year.”

– @BitRunX said in a tweet.

If Huobi employees actually rug away their assets, the crypto exchange will be powerless as domestic laws do not protect exchanges from such moves, the twitter user added. The user also advised users to withdraw their assets from Huobi and uninstall the app to protect themselves from a potential update containing a Trojan horse.

Huobi Fires 20% of Staff as FTX Contagion Continues to Spread

Earlier today, Huobi said it plans to reduce its workforce by around 20%, Reuters reported. The crypto exchange did not mention the recent outflows nor confirm any of the claims made by the Twitter community about its internal issues.

Huobi cites the current bear market as the reason behind the layoffs, adding that “a very lean team will be maintained going forward.” The move confirms earlier remarks by Tron founder Justin Sun, who said the structural changes at Huobi are expected to be completed by Q1. Sun is a member of Huobi’s global advisory board.

Outflows and layoffs at Huobi add to crypto investors’ concerns about reserves and solvency at crypto exchanges following the FTX’s crash and a series of other collapses and bankruptcies last year. Crypto lender BlockFi announced bankruptcy in November, while Genesis fired 30% of its staff on Thursday in a restructuring attempt in the wake of the FTX debacle.

This article originally appeared on The Tokenist