Huobi Not Able to Withdraw Over $13M User Funds In FTX

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Hbit, a Huobi Global company, has disclosed that it has $18.1 million in FTX, which it cannot recover. $13.2 million out of $18.1 Million were user funds. 

Huobi declared that the FTX scandal had affected it as well. It stated in a notice that it was unable to withdraw $18.1 million from the exchange that is currently in bankruptcy. Users own $13.2 million of them, while Hbit’s subsidiary owns the remaining $5 million.

In addition, Huobi stated that it had requested a $14 million unsecured loan to assist cover the $13.2 million in lost revenue, creating a $32 million liability for the business. According to them, frozen money has no impact on regular business operations. The Houbi Group’s other commercial businesses are unaffected and operate separately from Hbit.

Huobi letter explaining the failure to withdraw crypto from FTX

Unable to withdraw money from FTX – Huobi Document (Source: Huobi)

Huobi warned in this document that the business is not 100% safe.

“… the Board anticipated that the financial performance of the Group might be materially and adversely affected in the event that the Incident is not resolved. The Board will discuss with the Group auditor to discuss the impact of the Incident on the Group’s financial position.”

On November 11, FTX sought bankruptcy protection, which widely panicked the cryptocurrency market and sent prices down. There are many others who are not able to withdraw their money as well.

Following the collapse of FTX, cryptocurrency exchanges are under intense scrutiny. Concerns were raised when it was reported that the company of Alameda had reserves primarily made up of FTX tokens (FTT).

Exchanges have therefore been hastily posting evidence of their reserves. One of them is Huobi, which revealed in a transparency report that the company has almost $3.5 billion in reserves. Huobi tokens made up about $900 million of this total.

Huobi, however, is not under criticism due to the story. A linked wallet was seen by some users sending 10,000 ETH to Binance and OKX. Some members of the cryptocurrency community claim that exchanges manipulate money. 

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