On March 10, the price of Huobi token (HT) on the platform suddenly dropped from $4.60 to $0.30. In a few minutes the decline amounted to more than 93%.
The Huobi platform token HT suddenly dropped from $4.6 to $0.31, a drop of more than 93% within 10 minutes, and the current price has recovered to $3.87. Justin Sun said that because some users triggered a series of leveraged liquidation, it is a normal market behavior and… https://t.co/N9XoB9SSYD pic.twitter.com/4LtoOzQ2w4
— Wu Blockchain (@WuBlockchain) March 10, 2023
After recovering, the asset was trading near $4, having shed around 20% in 24 hours (CoinGecko).
Tron founder Justin Sun explained the sharp drop and rebound as the “liquidation of leveraged positions” by several users. In his words, this triggered a cascading effect across the spot and derivatives markets.
Sun assured that the wallets, assets and the platform’s backend are secure.
The operation of @HuobiGlobal exchange is #SAFE, the wallets are SAFE, and the backend is SAFE. The recent market fluctuations and the leveraged liquidations were caused by few users triggering a cascade of forced liquidations in the spot and HT contract markets.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
He announced the creation of a $100 million fund to bolster Huobi’s liquidity. About two hours later Sun confirmed the transfer of 100 million USDC.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
«We will continue to improve the depth of liquidity for leading cryptocurrencies and HT tokens, strengthen warnings about leverage risks and the possibility of liquidation. As for this incident, we will keep the community informed,» Sun said.
In response to his assurances of no issues at the platform, users noted the simultaneous decline of the exchange’s wrapped Bitcoin. On March 10, Huobi BTC rose to about $28,000, then plunged to around $11,000. As of writing, the Ethereum-based token was 44.5% cheaper than the original BTC.
In October 2022 Huobi agreed to the sale of a controlling stake in the Hong Kong-based investment company About Capital Management. The parties did not disclose the financial terms of the deal.
According to press reports, the ultimate beneficiary of the purchase was Sun. The entrepreneur rejected those claims, explaining that he had become a member of the exchange’s advisory board. He also admitted that he is a major holder of HT.
In November Huobi established a strategic partnership with Poloniex, a exchange owned by Sun. In March 2023 the platform integrated BitTorrent Chain, which is also backed by the founder of Tron.
Earlier in 2023 Sun denied rumours about Huobi, responding to concernsvoiced in the community.
In February the platform announced the closure of Huobi Cloud Wallet on May 13, 2023, ending its support.
On March 10 the company said it would wind down all NFT marketplace services on that same date. Users would need to withdraw their assets.
?Huobi to Discontinue Huobi NFT Services
❗️Please ensure that you complete your transfers before May 13, 2023 (UTC+8) when all services of Huobi NFT will no longer be available.
❤️Thanks for your continued support!
?Details: https://t.co/CWIN717isl
— Huobi NFT (@TheHuobiNFT) March 10, 2023
In November 2022 Huobi disclosed information about its reserves, according to which their value amounted to $3.5 billion.