In an effort to weather the unprecedented turmoil in the market, Huobi had to accept having to take measures to reduce jobs. The crypto exchange plans to lay off about 20% of its staff, a move confirmed by Tron founder and member of Huobi's global advisory board – Justin Sun.
The confirmation came hours after Sun downplayed investor concerns and asked the public to ignore FUD.
The impact caused by the FTX exchange has dragged several companies over the past few weeks towards decline. Recently, speculation about Huobi layoffs and internal problems have prompted significant withdrawals by investors. Based on the data, Huobi recorded an outflow of more than $85 million in the past 24 hours alone, bringing its weekly outflow to nearly $136 million.
In dealing with these rumors, Sun appeared to give an explanation. He said "ignore FUD and continue building. By staying true to our mission, investing in technology and security, and listening to our users, we are able to provide a trusted and reliable platform for our users to buy, sell and trade cryptocurrencies.”
Sun earlier dismissed rumors of mass layoffs at Huobi after China journalist Colin Wu claimed that the exchange was looking to cancel all year-end bonuses amid the industry's ongoing downturn.
Huobi's recently released proof of reserves revealed that the crypto exchange is most dependent on its own tokens for its reserves. Caue Oliveria, one of CryptoQuant's author analysts, revealed that around 44.36% of reserves are in HT and this is seen as risky.
Low allocation of stablecoins is another red flag. said Oliveria.
“Based on data collected by CryptoQuant, around 44.36% of its capital is allocated in HT, its own token issued by the platform. This type of risk can put pressure on the sustainability of the platform if they have high production like they did on FTX.”
