Huobi Is Not Transparent About HBTC Reserves

Huobi’s version of wrapped bitcoin, HBTC, claims to offer transparency and the ability to verify its reserves. Yet the exchange moved the collateral out of its official transparency wallets, making the token very opaque.

Huobi is questioned about transparency

Huobi created HBTC in February 2020, which is a 1:1 representation of BTC on the Ethereum blockchain.

At that time, the representative of this exchange confirmed that the asset will be clearly displayed on the Bitcoin and Ethereum blockchains:

At first, this was absolutely correct. As of early August 2021, there are about 31,000 HBTC and two exchange wallets also hold about 39,700 BTC.

From August 20-26, 2021, Huobi started moving the BTC in these two wallets to many other small wallets. And each time like that, the initial amount of BTC is divided, not “collected” in certain wallets. Therefore, BTC reserves are starting to be difficult to track.

For all we know — from checking this exchange’s official transparency page – the $800 million of outstanding Huobi Bitcoin (HBTC) is backed by less than $30,000.

After the information that HBTC was not transparent about collateral was spread, this cryptocurrency exchange admitted there was a delay in updating HBTC related information from Huobi Global on website.

This exchange has also updated its website displaying collateral to include a Huobi Trust account, showing that it is holding 38,979 BTC to represent the amount of HBTC in circulation in the market.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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