Justin Sun next in line as FTX contagion spreads from DCG to Huobi exchange amid insolvency rumors

• Huobi token plummeted 13.6% over the past week, exchange volume declined 23% with rise in concerns about its health.
• Crypto Twitter is filled with reports that Justin Sun’s exchange has plans to lay off employees, and accept salaries in stablecoins. 
• Huobi exchange volume plummeted from $510 million to $395 million within 24 hours. 

The Huobi cryptocurrency exchange, headquartered at Seychelles, is currently subject to speculation on crypto Twitter. Analysts uncovered the news that Huobi has offered its employees salaries in stablecoins, while cutting off internal communication between the exchange’s employees. 

Experts believe the exchange is at risk of collapse, that user funds could be wiped out from Huobi’s wallet and the mobile application could even act like a Trojan horse stealing sensitive data from users. 

Also read: What to expect from Ethereum price after whale transactions hit the highest level

Is Justin Sun and Huobi fallout imminent?

Justin Sun is the official adviser of Seychelles-based exchange Huobi. After Samuel Bankman-Fried’s FTX exchange imploded and the contagion spread, crypto Twitter has been filled with fear, uncertainty and doubt (FUD) about the fallout and insolvency of other cryptocurrency exchanges like Huobi. 

Experts on crypto Twitter reported that Huobi is dramatically cutting headcount and requires its employees to accept salaries in stablecoins. Crypto influencers and analysts shared details of how the exchange has closed internal staff communication channels to quell rising rebellion. Interestingly, the exchange’s trade volume has plummeted from $510 million to $395 million within a 24-hour period. 

Justin Sun recently addressed the concerns surrounding layoffs at Huobi, in the capacity of the exchange platform’s adviser. Sun denied the news of the layoffs in an interview with Hong Kong’s newspaper South China Morning Post. 

@BitRunX, a pseudonymous Bitcoin maximalist and trader, considers the situation a grave one and does not rule out internal employee rebellion. 

Why are crypto influencers recommending uninstalling the Huobi app?

@BitRunX believes Huobi’s situation is currently dangerous for users whose crypto the platform holds. There is a likelihood of a rebellion from internal employees and this could result in a rug pull of user assets. Typically, in situations like this, programmers have added backdoor Trojan horses and users have lost access to all their funds held by the exchange. 

A Trojan horse is a type of malware that disguises itself as legitimate code or software. Once inside the network, attackers are able to carry out any action that a legitimate user could perform, therefore putting their cryptocurrency holdings and sensitive information at risk.

The expert therefore recommends that users withdraw their assets from the exchange platform and uninstall the Huobi app to prevent it from being automatically updated to a Trojan Horse version.

Check this article for more updates, this is a developing story.