Huobi has established a $100 million liquidity fund to safeguard against any further sharp drops in the value of its native token, HT. This move was made in response to a sudden fall in the value of the HT token on Thursday, March 9, 2023, which was caused by “leveraged liquidation on the market caused by a few users,” according to a tweet by Justin Sun, the founder of Tron and a major holder of HT.
In response to the incident, Sun tweeted his apologies and pledged to improve the liquidity depth of main cryptocurrencies and HT token, strengthen leverage risk warnings, and liquidity capabilities. He also confirmed that he transferred $100 million in USDC to Huobi just after 04:25 UTC on Friday, March 10, 2023.
We have transferred 100 million #USDC to @HuobiGlobal. Done. https://t.co/0TbCsH2ixn https://t.co/XWeHI3FriZ
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
The HT token experienced a sudden drop from a 24-hour high of $4.81 to a low of $0.31 at 21:00 UTC on Huobi’s exchange, according to data from TradingView. This sharp drop occurred amid a broader crypto market correction, as $303 million in positions across the market were liquidated as traders digest the impact of Silvergate’s exit from banking crypto companies.
HT is currently trading at $3.8, according to Coinmarketcap, and this sudden drop and rebound highlights the volatility of the cryptocurrency market. This incident underscores the importance of having robust liquidity funds in place to protect against sudden price movements.
Earlier on Thursday, a tweet from Nansen.ai had flagged that Sun was moving $60 million in USDT, though the ultimate destination of that was Aave, and this was unrelated to the Huobi liquidity fund.
Huobi’s move to establish a $100 million liquidity fund demonstrates the company’s commitment to protecting its customers and investors from sudden market movements. As the cryptocurrency market continues to mature, it is becoming increasingly important for exchanges to have robust risk management measures in place to protect against such risks.
Read more:
- Huobi Token (HT) Sees 90% Flash Crash And Rapid Recovery In An Hour
- Hong Kong Crypto Trading Platforms Must Be Licensed By June 2023
- Justin Sun: Huobi Global Secures Crypto Trading License In Hong Kong