(Kitco News) - The cryptocurrency exchange Huobi has become the latest firm to tighten its belt amid the crypto winter as it confirmed plans to lay off 20% of its employees as part of its ongoing restructuring process.
Last October, Huobi Global majority stakeholder Leon Li sold his entire stake in the crypto exchange to About Capital, a Hong Kong-based investment firm that is reportedly led by Tron founder Justin Sun. The restructuring was announced soon afterward, and Sun was added to Huobi’s advisory board.
A Huobi spokesperson told Kitco Crypto that the exchange plans on moving forward with “a very lean team” amid the ongoing bear market. “The personnel optimization aims to implement the brand strategy, optimize the structure, improve efficiency and return to the top three,” they said.
The exchange also pushed back against rumors of its insolvency and reiterated statements made by Sun, who recently tweeted that the financial state of the exchange was good and user assets were fully protected.
The announced layoffs come a week after journalist Colin Wu first reported that the exchange was looking to trim costs and begin paying employee salaries with stablecoins instead of fiat currency, eliciting protests from staff.
TRX and HT take a hit
Following the layoff announcement, data from TradingView shows that the price of Sun’s Tron (TRX) token plunged 9.22% from around $0.055 to a low of $0.0497 before being bid back above $0.0514, marking a decline of 6.24% on the 24-hour chart.
Huobi Token (HT) also saw its price tumble 17.15% from a high of $5.22 on Thursday to a low of $4.32 in trading on Friday, but has since climbed back to $4.64.
Several crypto sleuths noted that around the time that the price of HT halted its decline and climbed higher, a wallet associated with Sun moved $100 million worth of stablecoins to Huobi. Shortly after the transfers, Huobi users noticed the appearance of a $1 million buy wall for HT, which means that someone was willing to commit $1 million to help prevent the price of HT from declining further.
The Tron-based stablecoin USDD has also struggled amid the concerns surrounding Huobi, losing its $1 peg and currently trading at $0.978. This drop in price led to a 2% decrease in the total value locked on Tron-based decentralized applications, according to data from DeFiLlama.
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Concerns around Huobi’s health have been further exacerbated by the fact that the exchange has seen $60 million in fund outflows over the past 24 hours and a total of $94.2 million in net outflows over the past seven days. According to Nansen, the highest outflows were from USDT and USDC stablecoin addresses and from Ethereum (ETH) wallets with high balances.
In the past 24 hours, Huobi has seen a significant increase in net outflows
— Nansen ?? (@nansen_ai) January 6, 2023
$60.9M* of the $94.2M* net outflow in the past week occurred in the past day alone
*Contains Ethereum, Avalanche, BNB Chain, Fantom, & Polygon flows pic.twitter.com/JV1Tg13QMY
Data from DeFiLlama shows that the TVL on Huobi has decreased from $3.12 billion on Thursday to $2.88 billion on Friday, a decline of roughly $240 million.
These latest developments, combined with the struggles of other prominent exchanges within the crypto ecosystem, have led many to recommend that crypto holders remove their tokens from Huobi and other embattled platforms and self-custody them instead.
