Huobi has acknowledged that the FTX saga has had an impact on it as well. They informed the public that they could not get $18.1 million back from FTX. Of this sum, customers are responsible for $13.2 million, and Hbit, as a subsidiary, is responsible for the remaining $5 million.
Huobi Plans to Make Up for The Shortfalls
Huobi also said it applied for an unsecured loan worth $14 million. Client losses were $13.2 million, and the purpose of the loan was to help with those costs. Due to everything said above, the firm now has a $32 million liability.
According to Huobi, the frozen funds won’t interfere with the company’s usual business operations. The Huobi Group’s other subsidiaries and Hbit are different corporate entities. The activities of Hbit have no impact on the rest of the Huobi Group.
Huobi made it plain in the warning that there are still some risks for the company. The company also said that the Board of Directors believes the situation may negatively affect the Group’s financial performance if the incident is not resolved.
Therefore, the Board of Directors will examine the Incident’s financial effect on the Group, the company stated. In addition, the Group Auditor will also be involved. FTX filed a petition for bankruptcy protection on November 11th. This petition led to generalized anxiety in the cryptocurrency market, which decreased prices. Many other individuals are also unable to withdraw cash.
Concerns Have Recently Been Voiced Over Huobi’s Transparency Report
Due to what occurred with FTX, cryptocurrency exchanges are now the subject of close investigation. Investors were concerned because Alameda Research, FTX’s sister business, controlled most of FTX tokens (FTT). As a result, other exchanges have been rushing to provide proof of their reserves.
A recent transparency report from Huobi revealed $3.5 billion in reserves. Approximately 900 million dollars of this total worth comes from Huobi tokens. BTC, ETH, Tether, and TRX made up most of the reserves.
Huobi, however, is now under criticism due to the revelation. Many users found a linked wallet transmitting 10,000 ETH to OKX and Binance. Crypto community participants have accused exchanges of engaging in fraudulent financial activity.
Crypt.Com and Gate.Io Have Been the Targets of Criticism
Additionally, other exchanges provide evidence of reserves, even though certain exchanges cause the bitcoin community concern. For example, in recent times, Gate.io and Crypto.com have been under intense scrutiny.
The bitcoin community uses ether transfers as evidence that exchanges are increasing their reserves. Crypto.com responded by stating that the ETH transfers had occurred three weeks earlier.
It further stated that the funds were immediately returned to cold storage. The funds, according to Crypto.com, were sent to a whitelisted address for commercial accounts.