Justin Sun Injects $100 Million Into Huobi After Cryptocurrency Flash Crash

After a flash drop in the platform's native token, Chinese-born crypto tycoon Justin Sun sought to allay doubts about the stability of the Huobi exchange, one of the biggest trading platforms for digital assets.

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According to data from CoinGecko, the value of the virtual coin, known as HT, quickly fell below zero at one point on Thursday before reducing some of the losses. It has lost 21% over the last day amidst a larger decline in the cryptocurrency and equities markets.

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Traders began to worry about the stability of the Huobi exchange due to forced liquidations of highly leveraged bets, according to Hayden Hughes, co-founder of social trading platform Alpha Impact.

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Sun, a Huobi advisor, stated that the cryptocurrency exchange and its wallets are secure. In order to increase liquidity, he claimed Huobi is creating a $100 million fund, and he added that the exchange "shall absorb all leverage-through position losses on the platform" that resulted from the recent volatility in HT.

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Blockchain evidence showed a wallet connected to Sun transferred $100 million of the stablecoin USDC to Huobi, according to a tweet by cryptocurrency analytics startup PeckShield.

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The collapse of the FTX exchange last year raised concerns about the stability of the remaining platforms in the digital asset market. The unease is a symptom of a larger crisis of trust in the cryptocurrency market, which is reeling from a collapse in token prices, other explosions, and an escalating regulatory crackdown in the US.

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Sun, 32, is the biggest shareholder in Huobi, according to people familiar with the situation who spoke to Trade Algo earlier. He denies having a shareholding worth about 60%. In reply to an inquiry for comment, he stated that he is the largest HT token holder and emphasized that his holdings haven't changed.

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The Tron network, whose native currency TRX is a top-20 digital money by market value, was founded by Sun. In the last 24 hours, TRX has decreased by around 12%, according to CoinGecko.

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According to DefiLlama, HT and TRX make up approximately half of the Huobi exchange's entire asset reserves.

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According to transaction data, more than $2 million worth of HT tokens were sold on Huobi in a short period of time on Thursday before the coin's price dropped, according to Riyad Carey, a research analyst at the digital asset data source Kaiko. Afterwards, he said, a number of sizable buy orders assisted HT in recouping some of its losses.

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In January, Sun also sent Huobi around $100 million's worth of stablecoins to help the exchange recover from a surge of withdrawals. Huobi announced its intention to lay off 20% of its workers at around the same time, joining a wave of job losses in the cryptocurrency sector.

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