Huobi’s HT Token Plummets 93% In Flash Crash

The Huobi exchange, one of the largest cryptocurrency exchanges in the world, suffered a major setback when its native HT token suffered a flash crash earlier today. The token lost more than 93% of its value in just a few hours, falling from a 24-hour high of $4.81 to a low of $0.31 on Huobi’s exchange. However, it quickly recovered from the incident, and is now trading at $3.81, still 20% below its pre-crash levels.

 

Abnormal Selling Activity

The flash crash was caused by a sudden surge in sales, with about $2 million in sales in the five minutes leading up to it, according to Riyad Carey, a researcher at financial data provider Kaiko. This is significantly more than the typical $600,000 buy on the HT-USDT pair. HT is used on the Huobi Global exchange to reduce trading commissions, purchase VIP status plans, vote on exchange decisions, and receive cryptocurrency rewards.

The sudden price volatility was noteworthy because the token is one of the more prominent cryptocurrencies, with a market capitalization currently of approximately $617 million. HT has also drawn investors’ interest because Justin Sun, the founder of the Tron blockchain, is a large holder and Huobi’s chief strategy advisor. Sun dismissed the flash crash right away, reassuring users that the exchange and all funds were secure.

Sun explained that the crash may have resulted from leveraged liquidations caused by a “few users”, triggering a chain reaction of forced liquidations in the spot and contract HT markets. Huobi would bear the full cost of user losses caused by HT’s market fluctuations. He also announced the establishment of a $100 million fund to improve multi-currency liquidity and promised to keep the crypto community updated on the flash crash incident.

 

Massive Stablecoin Withdrawal

Interestingly, blockchain data and research platform Nansen claims to have discovered some recent stablecoin movements attributed to Justin Sun. According to Nansen, Sun withdrew $60 million in stablecoins from Huobi on March 9. However, the platform quickly clarified that the movement was not necessarily suspicious, as it could have been part of Sun’s fund deployment practices, especially since he deposited $100 million USDC to Huobi afterward.

Despite the flash crash, the cryptocurrency market remains bullish, with Bitcoin and Ethereum continuing to rise. The flash crash serves as a reminder of the inherent volatility of cryptocurrencies and the risks involved in investing in them. Investors are advised to exercise caution and to carefully research and assess the risks before investing in any cryptocurrency.