Crypto exchange Huobi is having a difficult start to the new year, deeply affected by a series of negative reports. After the report that Huobi would cut a substaintial amount of workforece floated for days, the exchange finally publicly admitted that a layoff will happen. Amid the questions from outside, Huobi saw a major drop in the price of $HT, as well as a huge outflow of its reserve assets.
On December 30th last year, Colin Wu at WuBlockchain first reported that Huobi would cancel all year-end bonuses, and was preparing to lay off 400 to 600 employees. Two days ago, the media outlet added that Huobi planned to change its salary form from fiat currency to stablecoins, and those who cannot accept it may be dismissed.
The reports quickly raised concerns and doubts over Huobi's internal business. On Twitter, multiple KOLs advised people to withdraw from Huobi. In addition, more negative comments began to rise from the Twitter community. According to Twitter account BitRun, Huobi shut down communication groups with its employees yesterday, and all communication and feedback channels were blocked.
Today, Huobi finally admitted that a layoff was planned. It said it's going to cut 20% of the workforce, instead of 40% previously reported. Justin Sun, Huobi's advisor, released multiple posts on Twitter since yesterday, saying that Huobi's business is going well, it's safe, and it will "fully respect the legal demands of local employees", without mentioning the layoff or giving clarification to the internal chaos in question.
Under the circumstances, the assets in Huobi's reserve shrunk a lot. Currently, its reserve assets are worth $2.88B, which is 8.3% less than a week ago. Over the last 24 hours, more than $85m disappeared from the reserve, most of which were stablecoins and $BTC.
Huobi is the only major exchange that is suffering from such a problem. We list five other exchanges here, and the changes in value of their reserve assets are much more steady. Apart from the large number of withdrawals, another reason is that around 30% of Huobi's reserve asset is $HT, the exchange's own token, which also dropped a lot in value.
Speaking of token prices, compared with other major exchange tokens, $HT is the only one that dropped almost 10% over the last seven days. It indicates that the market is not optimistic about what's going on inside Huobi.