The withdrawal of support for its own stablecoin by the Huobi exchange led to the collapse of the asset

HUSD rate collapses by 64% after delisting from Huobi. Details of the collapse

01.11.2022 - 15:00

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2 min

What’s new? The HUSD stablecoin of cryptocurrency exchange Huobi lost its peg to the US dollar, and the asset’s rate collapsed by 64%. As of November 1, 13:40 UTC, HUSD is trading at $0,361147, according to aggregator CoinGecko. One of the reasons for the drop in value was the delisting of the stablecoin from Huobi on October 28.

Information about the rate on the CoinGecko platform

What else is known about the situation? Back on August 18, the stablecoin lost its peg to the dollar, dropping to $0,82. The developers explained the loss of parity by the closure of market maker accounts in some regions in accordance with legal requirements. The time difference in banking hours led to a short-term liquidity problem, which was subsequently resolved, and HUSD restored pegging.

On October 10, Huobi stopped trading HUSD in pairs with BTC, ETH, DOT, XRP, BCH, LTC, ADA, ALGO, DOGE, USDC, HT, LINK, EOS, ETC, TRX, CRV, UNI, FIL, OMG, AAVE, and THETA. All pending orders in the asset pair were canceled and funds were automatically returned to users' accounts. After delisting all HUSD of customers were converted to USDT. As the exchange’s representatives explained, the delisting decision was made as “part of our continuous efforts to promote the healthy development of the blockchain ecosystem.”

What is known about HUSD? The centralized stablecoin was launched in 2018. HUSD based on the ERC-20 standard was used as an aggregator for other stablecoins: TUSD, USDC, PAX, and GUSD. Thus, these coins appeared on Huobi as HUSD. The asset was backed by fiat currency and was audited monthly in the United States.

Also in October, the developers of the NEAR Protocol blockchain stopped supporting their algorithmic stablecoin USN. They explained that the stablecoin became “susceptible to undercollateralization during extreme market conditions,” which could pose risks to investors. The team allocated $40 million to reimburse USN holders.

Author:

Michael Golikov Michael Golikov

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