Huobi and Poloniex suspected of silencing reserves
Date: 2023-07-22 Author: Karina Ziganova Categories: BUSINESS
Poloniex has yet to publish a report on reserves, and Huobi's dependence on bitcoin on the TRON network leaves more questions than answers
The Poloniex cryptocurrency exchange has not yet submitted a report on its reserves anywhere. This drew the attention of the journalists of the publication Protos. The exchange first promised to "share a report" on its reserves back in November 2022 (shortly after the collapse of FTX).
At the same time, Poloniex assured customers that their assets were always secured in a 1:1 ratio. However, Protos doubts the veracity of these claims. Since November last year, the exchange has not provided the public with an independent audit of its reserves.
"Despite these assurances, Protos could not find any evidence of Poloniex's reserves," the reporters said.
At the time of writing, Poloniex has not commented on suspicions of a lack of reserves. Poloniex is far from the only crypto exchange that is owned by crypto entrepreneur Justin Sun, who is accused of fraud.
The Huobi exchange, which Justin Sun bought in October 2022, also raises doubts about its trustworthiness among journalists. For example, in 2022, the exchange promised to prepare an "audit" of its reserves for thirty days with the help of a certain "third party". However, since then, Huobi has never presented this "audit" anywhere. It is still unclear what kind of "third party" was in question.
Suspicions about the insolvency of both exchanges are reinforced by the fact that Poloniex and Huobi rely on tokenized bitcoin wBTC on the TRON network (of which Sun is also the founder). How many wBTC are managed by Poloniex is unclear. Poloniex customer support refused to provide Protos with the exchange's wBTC address on the TRON network.
Huobi is not doing well. As bitcoin analyst Willy Wu noted earlier, the exchange resembles a "walking disaster". Starting in the summer of 2020, Huobi's liquidity in Bitcoin (BTC) has been falling on a monthly basis.
As of July 2023, Bitcoin volumes on Huobi have collapsed to 17,035 BTC, according to Nansen. At the same time, back in June, this figure was 26,000 BTC, and in 2020 there were 450,000 BTC on the balance sheet of the exchange. Nansen also notes about 6500 wBTC on Huobi's balance. It is unclear if 6500 wBTC is part of 8970 BTC on the balance sheet of the exchange.
