A recent investigation by Kaiko Research has brought HTX under scrutiny. The report indicates that HTX has been involved in significant transactions between Tether (USDT) and USD Coin (USDC), raising concerns about possible ties to Binance.
HTX is said to have sold a substantial amount of USDT for USDC, approximately $350 million over the past three months. Simultaneously, two wallets linked to HTX initiated the sale of $400 million in USDC, with Binance as the recipient. This raises questions about the nature and implications of these transactions.
HTX’s JustLend product offers a staked USDT (stUSDT) for every USDT deposited, generating interest by investing in low-risk treasury instruments. Currently, HTX holds stUSDT deposits worth $400 million, matching the amount of USDC transferred to Binance.
For now, there is no concrete evidence of illicit activities on the part of HTX. Nonetheless, it is not the first time that unusual or incongruent behaviors with the market have been detected. An example of this was the launch of Worldcoin’s WLD token, where Kaiko identified irregular buy and sell orders associated with HTX.
HTX captured a significant portion of global exchange volumes after the Worldcoin token launch, especially in August when most exchange volumes were at all-time lows. It is worth noting that HTX has connections with Poloniex through its association with cryptocurrency mogul Justin Sun, who has faced accusations of money laundering with TRX by the U.S. Securities and Exchange Commission.
Investors Withdraw Funds in Concern
Concerns have arisen about HTX’s reliance on stUSDT, with holdings of approximately $400 million, equivalent to around 14% of its total reserves. Institutional investors are reported to have withdrawn their holdings due to this situation, raising concerns about the exchange’s stability. Furthermore, the decrease in HTX’s Tether reserves is concerning, given how easily exchanges can liquidate this stable cryptocurrency.
HTX holds only about 5% of its reserves in USDT, significantly less than Binance. A substantial portion of HTX’s reserves consists of TRX (19%) and HT (17%), its native token. Sun has denied his involvement in a $200 million injection into HTX’s reserves.
