Can Justin Sun's $100 million save Huobi exchange from FTX's fate?
|- Justin Sun transferred $100 million worth of USDC to Huobi for creation of a liquidity fund after native token HT price nosedived 93% on Thursday.
- Sun apologized to users for leveraged liquidation on the market caused by a few users and affirmed that Huobi’s operations are safe.
- Huobi token’s flash crash is a cause for concern among HT holders; advisor and TRON founder dismissed the event as market behavior.
Justin Sun, advisor to Huobi and founder of TRON addressed user concerns on the flash crash of exchange’s native token HT. Sun blamed market behavior and leveraged liquidation for Huobi Token’s 93% flash crash on Thursday.
It remains to be seen whether Sun’s $100 million USDC worth of liquidity fund creation saves Huobi from the fate of collapsed FTX exchange.
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Justin Sun announces creation of $100 million liquidity fund for Huobi
Justin Sun, crypto entrepreneur and advisor to Huobi, a leading cryptocurrency exchange addressed the uncertainty surrounding native token HT’s flash crash. Sun dismissed the 93% flash crash as market behavior and leveraged liquidation by crypto traders.
We have transferred 100 million #USDC to @HuobiGlobal. Done. https://t.co/0TbCsH2ixn https://t.co/XWeHI3FriZ
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
We have transferred 100 million #USDC to @HuobiGlobal. Done. https://t.co/0TbCsH2ixn https://t.co/XWeHI3FriZ
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
Sun announced the creation of a $100 million USDC liquidity fund and assured traders that Huobi will continue to improve the liquidity depth of main cryptocurrencies and the native token HT. Sun’s plan is to strengthen leverage risk warnings and liquidity capabilities.
Sun’s plan for Huobi token’s recovery is worth its weight in the crypto community since representatives for the entrepreneur have previously disclosed that he is not an owner of Huobi, but he owns tens of millions of HT tokens.
Huobi token’s flash crash and similarities with FTT collapse
Now defunct FTX exchange’s native token FTT nosedived from $22 to $2 in less than five days. The collapse of the native token played a key role in FTX’s bankruptcy. Huobi’s native token declined from a 24-hour high of $4.81 to a low of $0.31 on Thursday.
The flash crash caused uncertainty among crypto market participants. HT price recovered from its decline and the native token of the exchange is trading at $3.79 at press time.
Sun’s liquidity fund creation and assurance that the exchange will bear all leverage-through position losses on the platform could help fuel HT’s recovery.
#Huobi will bear all leverage-through position losses on the platform resulted from this market volatility event of #HT.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
#Huobi will bear all leverage-through position losses on the platform resulted from this market volatility event of #HT.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
Sun’s two exchanges Poloniex and Huobi merge in crypto winter
The merger of Huobi and Poloniex has created a new crypto ecosystem that combines Justin Sun’s interests in both cryptocurrency exchanges. In the middle of the crypto winter, Sun combined the operations of the two exchanges and released a disclosure to employees on March 9.
People close to the matter informed that multiple departments of Poloniex will be merged into Huobi Global including assets, markets and operations, product design, liquidity, customer service and compliance. All the assets will be transitioned to the Huobi brand.
Justin Sun's two exchanges officially merged. The Huobi employee letter shows that Poloniex departments like assets, marketing & operations, product design, liquidity, customer service, compliance, etc. will be officially merged into the Huobi. According to @ChainCatcher_ https://t.co/GnYkmm08HU
— Wu Blockchain (@WuBlockchain) March 9, 2023
Justin Sun's two exchanges officially merged. The Huobi employee letter shows that Poloniex departments like assets, marketing & operations, product design, liquidity, customer service, compliance, etc. will be officially merged into the Huobi. According to @ChainCatcher_ https://t.co/GnYkmm08HU
— Wu Blockchain (@WuBlockchain) March 9, 2023
Details on this merger are scarce at press time, however the merger of the two exchanges creates a combined user base of over 10 million and a daily trade volume in billions of dollars. The two exchanges are merging to form a stronger foothold at a time when the cryptocurrency ecosystem is rife with uncertainty.
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