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The HUSD stablecoin of the Huobi cryptocurrency exchange has untied itself from the US dollar. Recently, negative news has arisen around this trading platform. Probably, the decoupling of the stable coin is on a par with them. The $75 million stablecoin fell to $0.925 for the first time in its history.
Huobi HUSD stablecoin
Despite the recovery of the cryptocurrency market, news about the problems of stablecoins appear with enviable regularity. Recently, problems were observed in the stable coin aUSD. And the IMF not so long ago warned about the upcoming problems of stablecoins.
And yesterday it became known about another stable coin that has lost its peg to the dollar. HUSD is a stablecoin issued in 2018 by cryptocurrency exchange Huobi. The trading platform decided to launch its stablecoin when it had suspicions about the reliability of USDT.
It seems that the era of problems for stablecoins is not over yet, even though the cryptocurrency market is on a path of recovery after months of strong bear blows and some coin collapses. Now, it seems, there has been a glitch of another, and this time it is associated with a large and popular crypto exchange. This is HUSD, a stablecoin created by crypto exchange Huobi.
It has been stated that HUSD is backed by other stablecoins: True USD (TUSD), USD Coin (USDC), Paxos Standard (PAX) and Gemini Dollars (GUSD). Huobi customers could deposit any of these four stablecoins on the exchange and receive the exchange’s coin.
The reason for the unbundling of HUSD from the dollar is not clear. But recently, a trail of negative news has formed around Huobi. So, recently one of its founders announced the sale of his stake in the company, which is estimated at $ 3 billion. Colin Wu (@WuBlockchain) reported that Huobi is forced to reduce its staff by 30% due to the loss of markets and declining revenues. Huobi was also forced to leave the Thai market. And in June, the exchange suspended the withdrawal of user funds.
The growing number of problems of the exchange led to the untethering of its stablecoin. It will not be surprising if this Asian exchange is scammed and stops working. One can only guess what will happen to the assets of its users. After all, no one reliably knows about the real state of affairs in the company. It is possible that Huobi is another candidate for bankruptcy.
It is worth thinking about the risks if you keep your assets on this trading platform.
Author: Elvir, Analyst Freedman Club Crypto News
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