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Huobi has reiterated that it will remain adamant about protecting and not appropriating users’ funds, which shall be fully redeemable and withdrawable.
In a bid to promote transparency in the cryptocurrency industry, Huobi Global has published a detailed onchain report on its digital assets holdings. Huobi holds digital assets worth approximately $3.5 billion of users’ funds. The exchange has additionally promised to release another report in the next month to enhance user confidence. Moreover, confidence in centralized cryptocurrency exchanges has been significantly shuttered by the collapse of the FTX firm.
Furthermore, Sam Bankman-Fried has promised that the company was in good shape days before FTX filed for Chapter 11 bankruptcy and stole users’ funds.
“To further enhance users’ confidence and accelerate our efforts in improving transparency, we are working to perform another Merkle Tree Proof of Reserves audit with a third party within 30 days,” Huobi noted.
Nonetheless, data from South Korea-based blockchain analytics firm CryptoQuant shows a total of 12,000 ETH have been withdrawn from Huobi since publishing the balance sheet report. However, the company has defended itself claiming the cash is from a hot wallet involved in routine operations.
“The outflow was part of routine operations. The true situation is that the addresses we listed include some hot wallets; the on-chain deposits and withdrawals are part of the normal operation. The exchange is operating normally now,” Huobi told CoinDesk in an email.
Is Huobi Just Another FTX in the Making?
Earlier last month, About Capital acquired the majority shares of Huobi to become the controlling investor. The cryptocurrency exchange has worked on gaining customers’ trust in the past nine years of its existence. Nevertheless, most cryptocurrency traders are hesitant to leave their digital assets on any exchange, despite assurances of full account backing.
As such, Huobi has reiterated that it will remain adamant about protecting and not appropriating users’ funds, which shall be fully redeemable and withdrawable.
However, not your keys, not your coins. Consequently, cryptocurrency exchanges anticipate recording lower trading volume in the coming quarters. Moreover, Coinbase noted in its recent quarterly earnings report that cryptocurrency trading volume is expected to drop further in the coming months.
As more crypto exchanges scramble for a declining trading volume, analysts are forecasting that more firms may collapse due to a liquidity crisis.
Key courses for crypto exchanges collapse will be high-risk leverages and a huge slump in global trading volume. Customer acquisition and retention strategies will be a key aspect in the near future, as more exchanges proliferate the industry.
Meanwhile, more cryptocurrency exchanges are publishing their crypto holdings report in a bid to retain and attract customers. Earlier, crypto exchange Bitfinex released a detailed report on its digital assets’ holdings.
Proof of reserves for @bitfinex
Here is the list of the main Bitfinex walletshttps://t.co/TaS7Vy9qfP
– 204338.17967717 BTC (among top bitcoin holders)
– 2018.5 L-BTC (Liquid)
– ~1000 BTC on LN ⚡️
– 1225600 ETH (among top ethereum holders)
— Paolo Ardoino 🍐 (@paoloardoino) November 11, 2022
Notably, other exchanges are expected to follow the same path in the coming weeks.