Cryptocurrency platform Huobi opted to divest its HUSD stablecoin, causing it to collapse. We take stock of this decision, which could give credence to the discourse of certain regulators.
Huobi turns its back on its HUSD stablecoin
On October 27, the cryptocurrency platform Huobi released a statement that she was going to withdraw her HUSD stablecoin. This measure, effective since October 28, has led to the conversion of HUSD from the exchange into USDT at a one-to-one ratio.
However, after this decision seeing a company denying its own product, the price of the defunct stablecoin crashed. Within days, HUSD lost 70% of its value, now trading just 30 cents when writing these lines:
HUSD Price
Earlier this month, the stablecoin had already suffered a first loss of anchoring on October 10, when Huobi announced the end of HUSD-related trading pairs. The asset had then fallen to 89 cents before quickly picking up with parity.
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Does Justin Sun have a role to play in this case?
While Leon Li, the founder of Huobi, sold his shares to the investment company About Capital, Justin Su’s position in this case remains unclear.
Indeed, journalists like Colin Wu claim that the founder of the Tron ecosystem (TRX) is behind this takeover, and that USSD could even replace HUSD:
After Huobi abandoned the original stablecoin HUSD and started using Justin Sun’s USDD, the current HUSD de-pegged and the price is only $0.74, the 24-hour transaction volume is only $210,000. Huobi said it can help users convert HUSD to USDT. https://t.co/aYakOkKbuQ
—Wu Blockchain (@WuBlockchain) October 31, 2022
However, Justin Sun has denied the rumor presenting him as the real buyer of Huobi in an interview with our colleagues from The Block. He actually describes himself as an adviser to Huobi, although the amount of news about the platform he shares on his Twitter profile might suggest more involvement with the company.
Regarding the USSD, the fact is that this stablecoin is indeed available on Huobi since October 19:
📢 $USDD/ $BTCUSDD/ $ETH trading pairs are now live on @HuobiGlobal!
Enjoy Zero Trading Fee for 11 #USDD -related trading Pairs on @HuobiGlobal now!⚖️ $USDC $USDT $TRX $BTT $JST $SUN $WIN $NFT $APT
Let’s keep on BUIDLing together! 💪
📅 Live on October 19th pic.twitter.com/JY7cZXQSGF
—USDD (@usddio) October 19, 2022
Regardless of Justin Sun’s alleged involvement, it is unclear whether investors who trusted HUSD appreciate this maneuver. Already this summer, the asset had unscrewed for the first time, which then revived the memories of the UST.
With this episode, there is no doubt that we have here one more example, which will be reused in due time by regulators wishing to regulate stablecoins.
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Source: Huobi
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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