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Massive staff cuts at Huobi exchange lead to distrust

January 10 at 14:30
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Huobi exchange confirms 20 % staff reduction leading to employee protests. HT (Huobi token) price is down and the exchange experiences significant capital outflow.

As of 6 January, the Huobi exchange, one of the largest crypto exchanges confirms massive staff downsizing due to bear market conditions. Employees were supposedly forced to take out salaries in stablecoins instead of fiat resulting in protests. Trading volume decreases rapidly on the Huobi exchange and a lot of capital is being pulled out. Justin Sun, the founder of Tron ecosystem describes the staff cuts as a “short-term pain”.

Current Huobi position

Founded in China in 2013, Huobi has since grown to serve customers globally. It is known for its advanced trading platform, strong security record and is considered to be one of the leading exchanges in the industry.

"The planned layoff ratio is about 20%" and "With the current state of the bear market, a very lean team will be maintained going forward." said Huobi in a statement for Reuters News.

Employee protests reports

Reports by Colin Wu at WuBlockchain suggest that after the downsizing statement, the employees are forced to take out salaries in stablecoins, and those not accepting would be dismissed.

This change of payout currency from fiat to stablecoins has initiated a wave of protest from Huobi employees - according to some Twitter reports Huobi proceeded to cut internal communication channels to mitigate the protests. Both of these statements were later disapproved by a Huobi spokesman.

Rising uncertainty 

Justin Sun, the founder of the Tron ecosystem and also a Huobi advisor commented on the supposed downsizing on Twitter with an emphasis on Huobi’s strong security and compliance mechanism. Sun previously disregarded the rumors of Huobi downsizing, which he later confirmed as being true. He also wrote that the overall strategy of the company is to "Ignore FUD and Keep Building."

With the lingering uncertainty climate from the fall of the FTX exchange, Huobi s token HT crashed down over 11 % in under 24 hours after the announcement. That also sparked discussion about the exchange’s capital reserves, which rely heavily on their own token HT. The trading volume on Huobi has been decreasing over the last few days accompanied by rising capital outflows.

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