Crypto analytics firm Santiment says that exchange tokens recorded some of the largest price declines after the collapse of the FTX trading platform. Santiment says that amid the FTX debacle, crypto whales either dumped or bought the FTX (FTT), Huobi Global (HT) and Crypto.com (CRO) exchange tokens. According to Santiment, in 10 days crypto whales […]
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Lin Li, the company’s founder, has agreed to lend up to $14 million to New Huo Technology to bail out affected clients.
According to a new filing with the Stock Exchange of Hong Kong on Nov. 14, investment holdings company New Huo Technology, formerly known as Huobi Global, has $18.1 million worth of deposits stuck on troubled cryptocurrency exchange FTX. Of this amount, $13.2 million consists of clients’ deposits and $4.9 million comprises assets belonging to Hbit, another subsidiary.
New Huo Technology is majority-owned by Chinese businessman Lin Li, who also created Huobi Global, the 20th-largest crypto exchange worldwide by trading volume. On Nov. 13, the company disclosed that it had reached an agreement with Li for an unsecured, non-interest-bearing credit facility up to a maximum of $14 million to cover customers’ liabilities. Nevertheless, the company wrote:
“However, the Board anticipates that the financial performance of the Group might be materially and adversely affected in the event that the Incident is not resolved. The Board will discuss with the Group auditor to discuss the impact of the Incident on the Group’s financial position.”
The news appeared to have stirred investors’ nerves on Twitter after initial confusion surrounding the company’s former name, Huobi Global. Regarding this matter, the exchange issued the following clarification:
“On Oct 8, Huobi’s controlling shareholder company transferred all the shares of Huobi Global it holds to the fund of About Capital. New Huo Tech are independent entities. All ops of Huobi are normal, & we will continue to provide customers with safe & reliable services.”
The news also arrived at a time of heightened panic over exchanges’ solvency issues following FTX’s collapse. Cointelegraph previously reported on Nov. 13 that both Huobi and Gate.io came under fire for allegedly sharing snapshots of reserves using loaned funds.
During the last week, the crypto community has been dealing with the demise of FTX and its affiliated crypto businesses, and ever since then, the proof-of-reserves topic has found its way to the forefront of conversations. Another silver lining to the fiasco is the fact that cryptocurrency enthusiasts have removed large quantities of bitcoin and […]
Short CRO traders were paying as much as 3% premium to long traders on Nov. 14, reflecting extreme bearishness in its futures market.
Crypto.com’s native token Cronos (CRO) is showing restraint on Nov. 14 against mounting sell-pressure building in the wake of the FTX’s dramatic collapse last week. Now, the CRO/USD pair is eyeing a watershed price recovery.
On Nov. 14, CRO’s price wobbled between profits and losses, trading around $0.069 a day after crashing to $0.05, its lowest level since April 2020 — that’s a 60% price decline from November’s peak of around $0.178.
The period of CRO’s price decline occurred alongside a sharp drop in the token’s perpetual futures funding rates.
Funding rates are recurring payments made by traders based on the difference between the prices in the futures and the spot market. A positive funding rate means bullish traders (long positions) pay bearish traders (short positions), representing their confidence about a price rally.
Conversely, a negative funding rate means short traders pay long traders to keep their positions open. On Nov. 14, CRO’s funding rates on Huobi and OKX dropped to minus 3%, showing traders are extremely bearish on the token.
“This is literally the exact same dynamic that occurred before Celsius and FTX collapsed,” warned Dylan LeClair, senior analyst at digital asset fund UTXO Management on Nov. 13, when CRO funding rates were near minus 2%.
The CRO sell-off started from fears of contagion amid the FTX fiasco, particularly concerns that Crypto.com, a Singapore-based crypto exchange, would collapse in the same manner as FTX.
At the core of these worries is potential insolvency, with analysts pointing out that Crypto.com is holding low-liquid cryptocurrencies like Shiba Inu (SHIB) and its own token CRO as reserves, which reportedly make up 40% of the exchange’s total assets.
4.https://t.co/INIxikfNzy holds $1.6B worth of BTC/ETH/USDT/USDC/DAI/BUSD assets, accounting for 60%.
— Lookonchain (@lookonchain) November 13, 2022
40% of assets are low liquidity assets.
In addition, Crypto.com also moved $210 million worth of stablecoins from Binance and Circle before demonstrating its reserves to the public. Binance CEO Changpeng Zhao confirmed the move, urging caution, the day before CRO dropped to its April 2020 low.
If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU.
— CZ Binance (@cz_binance) November 13, 2022
What’s more, Crypto.com also misconducted a $400 million Ether (ETH) transaction, sending it to a Gate.io exchange wallet instead of its cold storage. Later, the exchange did manage to recover the funds, but that also raised a lot of questions.
Crypto_com CEO is claiming they “accidentally” sent $400 million of their eth to the wrong wallet.
— Coffeezilla (@coffeebreak_YT) November 13, 2022
He’s either lying, or incompetent. https://t.co/hWXvPqBime
Overall, Crypto.com saw its users withdraw $14 million in ETH and $39 million in other tokens over the weekend, according to data tracked by Argus Inc.
Strictly from a technical perspective, however, CRO’s price could nevertheless see a potential relief rally in the coming weeks.
A set of indicators support the said bullish outlook, including CRO’s weekly relative strength index (RSI), which dropped to nearly 30, or nearly “oversold” territory. A similar drop in June earlier this year had preceded a 75% recovery rally from $0.099 to $0.162, as shown below.
The other bullish indicator includes strong historical support of $0.061. In addition, CRO’s current price range of $0.061 and $0.111 has the token’s highest volume profile visible range (VPVR) on record.
In other words, CRO price could recover to $0.111, up over 50% from the current price levels, as its next upside target.
Related: Exchange outflows hit historic highs as Bitcoin investors self-custody
Conversely, CRO/USD falling alongside funding rates suggests that its drop may have been driven by futures markets, which was also the case with Terra’s collapse in May. Thus, the persistent bearish sentiment across the entire cryptocurrency market could dampen CRO’s recovery prospects.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
A wallet address linked to the Huobi exchange was found transferring 10,000 ETH to Binance and OKX deposit wallets soon after releasing its asset snapshot.
To counter the rising mistrust among crypto investors following the FTX collapse, crypto exchanges unanimously decided to share proof of reserve with the public as a way to showcase legitimacy. However, certain anomalies found during on-chain investigations suggest foul play and market manipulation.
Just two days after Crypto.com made its cold storage information public, investigators found that 320,000 Ether (ETH) was sent to Gate.io on Oct. 21, 2022. However, Kris Marszalek, the CEO of Crypto.com, dismissed any wrongdoing by stating that the funds were transferred accidentally and were eventually returned back to the original storage.
On Oct. 28, Gate.io released its proof of reserves snapshot, which, Solidity developer Shegen alleged, was done using Crypto.com’s funds, and questioned:
“This was topping up for the proof. Gate and crypto.com are fucked?”
Moreover, the crypto community suspects Huobi of attempting a similar manipulation. A wallet address linked to the Huobi exchange was found transferring 10,000 ETH to Binance and OKX deposit wallets soon after releasing its asset snapshot.
After Huobi released the asset snapshot of the asset reserve, 10,000 ETH was transferred from 0xca...c3fc (Huobi 34) to Binance and OKX deposit wallets. The Huobi 34, which had 14,858 ETH at the time of the snapshot, currently has only 4,044 ETH left. https://t.co/wrphZxadBM pic.twitter.com/B2lRXMF8su
— Wu Blockchain (@WuBlockchain) November 13, 2022
Blockchain investigator Colin Wu pointed out the transactions on Etherscan, which proves that Huobi had shown 14,858 ETH in its latest snapshot, which has since fallen down to 2,463.5 ETH at the time of writing.
None of the exchanges in question have publicly retaliated against the claims put forth by the crypto community. The possibility of multiple crypto exchanges working together to manipulate investor funds has forced the community to keep their guard up until an official statement.
Both Huobi and Gate.io have not yet responded to Cointelegraph’s request for comment.
Related: Binance shares wallet addresses and activity after proof-of-reserve pledge
As more crypto exchanges make their cold storage information public, the immutable nature of blockchain technology will allow investors and investigators to dive into the history of the exchange’s operations.
“Our objective is to allow users of our platform to be aware and make informed decisions that are aligned with their financial goals," said Binance while revealing wallet addresses.
When it was first discovered that FTX might be insolvent, a large slew of crypto exchange executives said that they aimed to provide proof-of-reserves audits. While exchanges like Binance and Crypto.com have provided wallet addresses tied to company wallets, blockchain analytics firm Nansen has detailed the company is in the midst of creating a display […]
The company may relocate up to 200 employees from Seychelles to one of the Caribbean jurisdictions.
Chinese crypto exchange, which recently has had to disavow the rumors about massive layoffs inside the company, unveiled the plans to move its headquarters to one of the jurisdictions in the Caribbean, with Dominica being the first candidate.
In the report from Nov. 1, citing one of the board members, the FT revealed the company's intention “to go all in in the Caribbean.” The reason is the region’s “super-friendly” crypto stance, common law systems and English language adoption. Among Dominica, the “frontrunners” among the local nations to host Huobi are Panama and the Bahamas.
Huobi representative already met Dominica’s prime minister Roosevelt Skerrit last year, and the company would collaborate with the country’s government to enhance its crypto infrastructure.
Currently, the headquarters of Huobi is at the Seychelles islands in the Indian Ocean, with the exchange having offices in Hong Kong, South Korea, Japan and the United States. According to FT, the company plans to move up to 200 employees out of 1,600 to the new HQ.
The Caribbean became a hot spot for the crypto industry, especially with the U.S.-founded exchange FTX moving from Hong Kong to the Bahamas in 2021. Among other companies to register in local jurisdictions are Binance, C-Trade and PrimeBit.
Related: The Caribbean is pioneering CBDCs with mixed results amid banking difficulties
In October, About Capital Management (HK) Co. Ltd, a Hong Kong based-asset management firm, became Huobi Global’s controlling shareholder following a successful buyout deal.
Later that month, citing “people familiar” with Huobi, Chinese crypto blogger Colin Wu reported that in the aftermath of the takeover, two top executives resigned from the company, and it was preparing to trim its 1,600-employee staff. Huobi’s spokesperson refuted the rumors about mass layoffs and remarked that the company “enjoys a healthy cash flow.” However, he admitted that due to the crypto market downturn, some cost-cutting could still be on the cards though it didn’t clarify what this could entail.
On Thursday, the cryptocurrency exchange Huobi Global announced that the trading platform plans to delist the stablecoin HUSD and the delisting will begin at 08:00 (UTC) on October 28, 2022. Furthermore, users with HUSD held on the exchange will see their balances auto-converted to the stablecoin asset tether and the exchange expects to complete the […]
Oasys, a Web3, EVM-compatible, gamefi-focused blockchain project, launched the first phase of its mainnet on October 25th. The company, which has gathered support from AAA gaming companies such as Sega, Ubisoft, and Bandai Namco, will start validating blocks from all nodes in preparation for its definitive activation slated to happen on November 8th. Oasys Launches […]
Billionaire Justin Sun is expecting China to shift its policy on cryptocurrencies after banning the digital assets last year. In a new interview with Bloomberg TV, the founder of the Tron blockchain network says he believes a crypto policy change in China could come as early as next month. “Definitely for the crypto policy in […]
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