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Bitcoin exchange Huobi in financial difficulties – Justin Sun plans layoffs

Huobi, an exchange that trades in Bitcoin and other cryptocurrencies, appears to have defaulted. Closely related to this is Silvergate Bank, which also has ties with the FTX exchange Sam Bankman fried she has.

Silvergate Capital: Stocks fall after bank inflows

The best way to compare what happened in Silvergate in the past few days is to run the bank. As Reuters on January 5th mentionedInvestors withdrew more than eight billion US dollars from the stock exchange. At press time, Silvergate stock is down 50 percent month over month.

The bank announced that it will reduce the number of employees by about 40 percent, i.e. by 200 employees. The company recently sold $5.2 billion in debt for a loss of $718 million to stay afloat.

US law enforcement has seized US accounts from Silvergate and Farmington State Bank, according to Reuters. The latter, in turn, is connected to the insolvent FTX crypto exchange. Silvergate is also said to have connections to the FTX network.

The cryptocurrency bank has also been accused of failing to take anti-money laundering precautions. It is also closely associated with the Huobi bitcoin exchange.

Huobi bitcoin exchange need money

Huobi is currently among the top 30 cryptocurrency exchanges in terms of 24-hour trading volume. As Justin Sun, who bought 30 percent of the stock exchange in October 2022, told Reuters today Famous The exchange plans to lay off 20 percent of its workforce. Evidence from the crypto space suggests that Huobi may also be in financial trouble, especially when it comes to the exchange’s fiat reserves.

One leaked According to the document, Justin Sun simultaneously muted all internal communication channels of the workforce. Furthermore, bonus payments have reportedly been suspended, and salaries appear to be paid only in the form of stablecoin Tether (USDT). The authenticity of the document has not been confirmed.

Crypto Analysts from Arkham Crypto Intelligence situation Meanwhile, there is a connection between the events surrounding Silvergate and Huobi. The assumption is that Huobi has encountered payment difficulties due to the operation of Silverbank, so it is forced to take drastic measures.

However, criminal investigations into bitcoin exchanges can exacerbate the situation. Some time ago, the exchange was accused of using inadequate KYC measures. Twitter user cipher_blade proved in a self-experiment that these are not rumours. He disguised himself as Taylor Swift and Borat and passed the KYC verification of the Bitcoin exchange in the process.

KYC policy setting at Bitcoin exchange Huobi. BTC-ECHO screenshot, source: https://twitter.com/cipher_blade

What does that mean for investors

In the crypto space, this news leads to uncertainty: is the bitcoin exchange now threatened with the same fate as FTX? In principle, hasty panic and emotional decisions are not recommended in such situations. However, it is important to closely monitor the situation and other developments.

However, if you are interested in keeping your coins as safe as possible, you can check out our wallet comparison Hardware wallets Look around and make yourself independent of external service providers.

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