Huobi Denies Reports of Executive Arrests as Stablecoin Reserves Sink

Stable coin reserves are down 30% on reports that several executives were arrested in China. According to data from Nanceen, traders have withdrawn $49 million in stable coins over the past week. Amid uncertainty, a spokesperson for Coby is denying reports of the arrests. Zach gonna toss this one over to you. What do you make of this news? There are also some rumors of insolvency that we can dive into later. But what do you make of this story? Yeah, another stale coin story but quite different in tenor. Uh I don't know what to will be anymore, right? Like I really don't, it's really hard to see what's going on in their world. We saw a lot of reports. Uh I guess last week that finance is pretty active in the Chinese market, I think will be has long been linked to the Chinese market as well. So presumably there's something going on there. China's regulatory posture on crypto remains mercurial at best and often rather opaque, right? Um If we're seeing reports or rumors of detentions uh relating to these people who are, you know, behind this project, yeah, that's gonna spook a lot of investors and I think we're seeing sort of a flight from the this platform's products. So yeah, it, it, who knows, who knows really will be I think is one of those uh you know, big exchange, big presence in the Asian markets. But you know, as it relates to their presence in China, I know that's been fraught for a long time now and this is a continuation of that story but will curious for your take. Yeah, so the Justin Son stuff, I was looking back through the spring and I feel like we just go through so many headlines on the show. I was losing track of when Justin son who will be uh had that perfect marriage happen sometime I think around March so I can give you correct it in a second. And that turned everyone's heads, right? Because has been uh the owner of a few different exchanges in the past the network. Obviously, there's been a lot of different people in the press coming after him. There's been litigation, there's him being chased out of China and that whole story. And so of him going to it was a huge exchange within the ecosystem, sort of a pillar in East Asia for trading and exchanging him going to that spot, made some people uneasy. And they're wondering like, oh, is he just coming in to bail it out and set it up because he has a lot of funds or is this kind of the for what will be the last ditch effort to be able to, like, uh stain itself back up on its feet. This story here, I don't know. I think we got to wait a little bit. We have seen many of these stories in the past of where, like there's been executives arrests in China and like, we don't quite know because there's a lot of state state sponsored media in China. And so it's often difficult to know like what the truth is until a few weeks afterwards. Like, I can already think of three or four stories where we've had similar instances in the past. And sometimes they turn out to be true and sometimes not so much to be true from my understanding, a lot of the key executives and key person who we had left China quite a while ago after China started banning a lot of these trading practices. Going back in 2021. I think a lot of people just think of like Bitcoin mining being banned in China in 2021. But there was many more from the Communist Party during that time around crypto that forced a lot of these exchanges to move to different parts of East Asia, like Singapore or Hong Kong or Japan, Indonesia, et cetera. So I'm, I'm a little surprised that there's still probably key personnel there that could be touched by the Chinese Communist Party. I guess it sort of sort of shows you that people felt maybe comfortable and able to move back in if these reports are confirmed to be true. But we'll have to wait. I think for a little more detail before uh I start calling for any problems with ABI itself for over two. Yeah, there's some data in this article from D five Lama that shows the total value locked is at $2.5 billion and this is down from over 3 billion at the beginning of the year. And I think probably the most interesting part is it shows 26.5% of holdings in Ron's native token and then another 20% in uh native token, the exchanges native token. And if you click on the story at the very bottom of the article, it takes you to a coin desk article from last year where there's the representative from crypto quant who says that Hui's reserves have a highly risky setup at the moment. They went on to say tokens issued by the company itself are a risk to the companies that help since it's difficult to sustain the veracity of the issuance of these coins at that time, it was amid the FTX fallout. So we were talking a lot about proof of reserves and Hube had published proof of reserves. But if you dive deeper into the article, the question here uh comes to proof of liabilities. I think that um you know, someone did reach out to Hoby on these proof of liabilities they were never published. Um And so this conversation about uh holdings and if they are solvent or insolvent has been going on for a little while. And so it will be interesting to see what happens after the arrest of these executives. Of course, these are all just rumors and nothing has been confirmed, but this conversation has been happening since the fall of FTX Wendy. What do you think? Four, I'm just kidding guys. I we need a lot more information to come out before um before we make judgments yet, I think. But I will say at the same time, you should never trust a crypto exchange. So if you've got your funds on who you probably should remove them and that goes for every single crypto exchange, even coin based. Um because things can always happen, you never know. And if you're not in complete control of your crypto assets or your fiat cash, you should probably, you know, look at the risk for that. So I hope everybody is safe. I hope the lobe is fine. I hope nobody's been arrested. But at the same time, you cannot trust, you have to verify. And are we supposed to go to break now? I fact check myself really quickly here for August or October of 2022. They became Justin son, became a global advisory board member for Huo but also in that same blog post is that he was now like the leader of hui so little discrepancy there.