Brokerage cryptocurrency plummets 74% and director tries to calm investors

justin sun
justin sun

When Bitcoin fell to $20,000 (9) this Thursday, Huobi’s token lost 74% of its value in a short period of time in an event dubbed a ‘flash crash’.

With no news justifying the magnitude of the drop, Huobi Token (HT) cryptocurrency investors became even more concerned. Justin Sun, an advisor to the brokerage, had to go to social networks to say that Huobi was safe, that is, it had not been hacked.

According to CoinMarketCap data, HT has a market cap of R$10.6 billion today. Huobi Token is the sixth largest cryptocurrency linked to the exchange, second only to Binance’s BNB, Bitfinex’s LEO, OKX’s OKB, CryptoCom’s CRO, and KuCoin’s KCS.

Huobi Token (HT) flash crash asks Justin Sun to explain what happened

The Huobi Token (HT) lost 74% of its value in just 15 minutes on Thursday evening (9). In the so-called flash crash event, the Huobi cryptocurrency managed to recover in the following minutes.

Flash crash on Huobi Token caused Huobi exchange cryptocurrency to lose 74% of its value in minutes.

Since investors believed that some kind of hack might be responsible for the fall, Justin Sun himself, the broker’s advisor, had to explain the situation on his social networks.

To ease the situation, Sun noted that Huobi had not been hacked and that the flash crash would have been caused by a cascade of liquidations by highly leveraged players.

“Huobi Global’s brokerage operation is SECURE, the wallets are SECURE, and the backend is SECURE.”

“Recent market swings and liquidations [de posições] leverage losses were caused by too few users, leading to a cascade of forced liquidations in the spot and contract markets [futuros] from HT”added Justin Sun.

Finally, Justin Sun, who is also the founder of the cryptocurrency Tron (TRX), stated that “These fluctuations are simply the result of market behavior.”

Despite recovering some of its value, the Huobi Token (HT) is still trading with a daily drop of 14.5% (10) this Friday. Of the top 100 cryptocurrencies in the market, HT is among the five worst performing companies during this period.

Has the price of Huobi Token (HT) been manipulated?

The most famous event of its kind is the so-called Flash Crash of 2010. On that date, a single trader caused the US stock market to lose $1 trillion in market value while operating from his home. Navinder Singh Sarao was charged with 22 crimes but served his sentence under house arrest.

That’s why Justin Sun’s statements are “the liquidations were caused by too few users” may indicate that the token price has been manipulated. However, with little regulation, it is hard to believe that this would be investigated by the authorities.

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Source: Live Coins