Justin Sun Won’t Take His Own Stablecoin: TUSD Not Accepted as Collateral
If allegations are true, HTX/Sun may owe customers over $2 billion | Credit: Shutterstock
Key Takeaways
- TUSD has been depegged from the US dollar.
- Reports claim Justin Sun is converting user USDT tokens into TUSD.
- HTX struggles to stabilize its stablecoin as it faces devastating attacks.
Justin Sun’s HTX (formerly Huobi) has been consistently in the headlines recently, whether it’s regarding a major hack that led to the loss of $8 million in crypto, or regarding the lack of licensing in Hong Kong.
HTX founder has appeared in several headlines, including instances where he made wild suggestions of purchasing leftover digital assets held by the collapsed exchange FTX.
But, now, investors are even more wary of Sun and HTX. Analysts claim that Sun has been taking USDT tokens owned by customers from his platform and converting them into TrueUSD, his company’s native stablecoin.
Moreover, Adam Cochran, a crypto analyst, claims that Sun’s HTX might actually be $2.4 billion in debt. He also claims that HTX now does not accept its own stablecoin TUSD as collateral.
Trouble For Sun
To start off, HTX has been confirmed to be the victim of a hack that led to the loss of $8 million in ETH.
Sun even confirmed the news on his personal X page.
The truly interesting part is that Sun/HTX has pledged to give the hackers a 5% bonus for the $400K worth of stolen money. According to Etherscan , if the hacker returns the money, HTX will take the hacker into consideration for employment as an exchange security consultant.
The founder stated later that the amount stolen pales in comparison to the company’s holdings. He also emphasized that all customer funds are safe and that the platform will carry on as usual.
“$8 million represents a relatively small sum in comparison to the $3 billion worth of assets held by our users. It also amounts to just two weeks’ revenue for the HTX platform,” said Sun.
Sun/HTX’s troubles don’t just stop there. Following a major scandal in Hong Kong concerning JPEX (Japan Exchange), the Hong Kong Securities and Futures Commission (SFC) released a list of the crypto exchanges that applied for a license to operate in the city.
Although Sun had earlier claimed that HTX applied for said license, the regulating body list argues otherwise. According to the SFC, only two companies have currently received approval to operate a crypto exchange: OSL Digital Securities Limited and Hash Blockchain Limited.
Moreover, the regulating body stated that HKVAX, HKBitEx, Hong Kong BGE Limited, and Victory Fintech Company Limited have also applied for the VATP license.
Finally, Cochran deduced that Sun/HTX is currently in debt to customers a hefty sum of $2.4 billion for allegedly transferring customer funds without giving notice.
USDT, stUSD & TUSD
Cochran states that Sun/HTX “enabled a feature where you can now stake *either* USDT or TUSD into stUSDT staking.” While investors would normally expect the staked crypto to be sent to a burn account, Cochran says that Sun sends the tokens to his personal account “and in turn against debt to prop up JustLend. Or to Huobi, and the claim was Huobi was burning them with Tether – but instead Huobi counterparties for USDT end up being its own deposit wallets or Binance.”
So, Cochran’s $2.4 billion math comes as a result of calculating how much USDT Sun takes from his customers’ accounts to buy TUSD on other platforms such as Binance.
