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Suspicious Activity Surrounding Huobi Token (HTX) Raises Questions: Has User USDT Been Diverted to stUSDT?

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Suspicious Activity Surrounding Huobi Token (HTX) Raises Questions: Has User USDT Been Diverted to stUSDT?

Does stUSDT really invest in RWA? Where does the interest on stUSDT come from? Why is the amount of stUSDT on HTX similar to the amount of USDT on JustLend? Research firm Kaiko raises many questions in its latest report.

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Unusual Activities of Huobi HTX

Kaiko's report on October 12 summarized a series of recent unusual activities related to Huobi HTX:

1. Abnormal Trading of Statter Network STT

STT is only listed on Poloniex, also owned by Justin Sun, and its trading volume reached $25 million in the past 5 days.

The significant increase in trading volume, along with unusual trading patterns, indicates artificial trading on the exchange.

STT Trading Volume on Poloniex

2. HTX Lists Worldcoin, Market Share Increases Fivefold?

HTX recently listed Worldcoin WLD, and WLD's token trading almost dominated HTX's main activities, increasing HTX's market share on centralized exchanges from 4% to nearly 20%.

Similar to the surge in Poloniex's trading volume, there is little data to explain such drastic changes, especially when all exchanges have been at low trading volumes for years.

HTX Weekly Trading Volume Share

3. Increased Trading Volume of Altcoins on HTX, BTC, ETH Remain Stable

Kaiko points out that the surge in HTX's trading volume is mainly due to small altcoins, with the weekly trading volume of altcoins increasing from $500 million to $2.5 billion within two weeks on July 16.

However, the more prominent BTC and ETH have not shown significant changes in trading volume.

HTX Weekly Trading Volume Changes

Is HTX and Justin Sun Trying to Fill the Gap in stUSDT Rates?

This is the focal point of Kaiko's report, with concerns about the opacity and doubts surrounding stUSDT being a topic of community interest, as the actual real-world assets behind stUSDT claimed to be invested in RWA remain unknown, including the source of interest.

Kaiko notes that HTX has seen a significant amount of USDT to USDC trading since July, with over $350 million in USDT sold and about $400 million in USDC transferred to Binance from two HTX-associated wallets.

Kaiko also references a report from ChainArgos, which suggests that stUSDT is not invested in RWA assets but rather resembles a collateral version of Justin Sun's lending protocol JustLend.

The report suspects that the overall operation involves HTX users' USDT being collateralized in JustLend, leaving users with only a form of stUSDT IOUs.

Summarizing Concerns about stUSDT

In conclusion, several concerns arise:

  1. HTX's trading volume is abnormal and subject to artificial intervention.

  2. stUSDT appears to be a collateral version of JustLend.

  3. stUSDT is not invested in RWA, and the source of interest is unclear.

  4. HTX likely misappropriated users' USDT, with HTX holding $400 million in stUSDT, which closely matches the $327 million USDT on JustLend.

Lastly, venture partner Adam Cochran speculates that Justin Sun's liquidation line on Ethereum collateralized in JustLend is $1,488, which explains the continuous fund transfers from HTX-associated addresses to Binance.