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Tron's Price Sinks 8%, USDD Depegs Amid Drama at Justin Sun-Related Huobi Crypto Exchange
Community sentiment soured around Huobi, which has Tron founder Sun as an adviser, after it said it will lay off hundreds of staff in coming weeks.
Updated Jan 6, 2023, 7:49 p.m. Published Jan 6, 2023, 9:56 a.m.
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The price of Tron (TRX), the 18th-largest token by market capitalization, tumbled Friday amid tensions stemming from crypto exchange Huobi as the broader crypto market held steady.
Tron founder Justin Sun sits on Huobi’s advisory board. The exchange said Friday it will cut its headcount by 20% and require employees to take their salaries in stablecoins. It also closed internal staff communication channels to quell a rebellion, according to reports on Twitter.
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TRX fell nearly 8% in the past 24 hours, data shows. The price is above a support level of 5 cents, and if it drops below that, the tokens could slip to as low as 3 cents, price charts show. Huobi’s native HT exchange tokens have lost as much as 11% in the past 24 hours.
The Tron-based stablecoin USDD fell 3 cents, effectively losing its intended peg to the U.S. dollar. Such price action caused the value locked on Tron-based decentralized applications to fall by 2%, DefiLlama data shows.
Futures tracking TRX saw less than $1 million in liquidations on exchanges, suggesting the selling was mostly spot driven. Spot refers to actual tokens, while futures are derivative financial instruments that allow traders to bet on the prices of the underlying tokens.
Meanwhile, security firm PeckShield noted on Twitter that crypto wallet addresses linked to Sun moved over $50 million to crypto exchange Binance.
The fund movements came amid speculation among Twitter users about the overall health of Huobi and the safety of customer funds. Data from blockchain analytics Nansen showed Huobi had seen $60 million in fund outflows over the past 24 hours.
Sun, Tron and Huobi didn't immediately respond to requests for comment.
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