​Huobi CEO attributes the 90% collapse in the HT rate to the liquidation cascade

What’s new? On March 10, the rate of the native token of the Huobi (HT) crypto exchange momentarily collapsed by more than 90%. As of 08:00 UTC, the coin price has partially recovered and stabilized at $3,82. The exchange’s CEO Justin Sun explained on his Twitter that the sharp drop in value was caused by a cascade of liquidations of several large users. In addition, he announced the creation of a $100 million liquidity fund.

We deeply apologize for the impact of the leveraged liquidation on the market caused by a few users, and in order to further improve the multi-currency liquidity of the @HuobiGlobal platform, we will set up a liquidity fund with an investment of 100 million US dollars. — H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023

What else did Sun write? The head of Huobi revealed that the exchange team will continue to improve the liquidity of the main cryptocurrencies and the HT token. In addition, Sun said that the platform will reimburse customers for all losses on leveraged positions on Huobi resulting from the volatility of the exchange token.

What is known about Huobi? It is a centralized exchange (CEX), founded in 2013 in Beijing. Currently based in Seychelles, it also has offices in Hong Kong, South Korea, Japan, and the United States. The platform hosts 611 cryptocurrencies and 838 trading pairs. The daily trading volume is $784,79 million. The HT token is used to receive fee discounts, as well as additional rewards and bonuses. It ranks 71st in the cryptocurrency ranking with a capitalization of $618,63 million.

On February 20, the HT rate increased by 21,8%. This came after Sun announced that Huobi applied for a license to trade cryptocurrencies in Hong Kong.

On February 25, Sun staked 150 100 ETH on the Lido Finance platform. This event automatically activated a security feature called Staking Rate Limit, which reacts to large inflows of funds and eliminates possible side effects in the form of reduced rewards without having to suspend accepting new deposits.

To learn how Huobi was affected by Justin Sun’s purchase, see GetBlock Magazine’s article.