No Stablecoin Is Safe- Huobi USD Drops Almost 20% Below Peg

Gabriel Sieng
August 19, 2022
10 mins read

Huobi’s $HUSD is the latest stablecoin to depeg from the dollar. According to CoinGecko, the stablecoin traded for as low as US$0.82 earlier today.

Today, the HUSD/3 CRV liquidity pool on #curve is skewed, with #HUSD accounting for more than 88% and the current HUSD price around $0.9.https://t.co/0TL9L2OFlr pic.twitter.com/R4hn0frPny
— 8BTCnews (@btcinchina) August 18, 2022

Earlier this year, Huobi exited its stake in the stablecoin and $HUSD is now controlled by Stablecoin Universal.

The liquidity of the cash-backed stablecoin was skewed on decentralized finance (DeFi) protocol Curve Finance where there’s more HUSD than its paired tokens (Dai, USDT & USDC).

We are aware of the current liquidity issues associated with the HUSD stablecoin, which is issued by Stable Universal Limited and built on the Ethereum network.
— Huobi (@HuobiGlobal) August 18, 2022

Huobi confirmed on Twitter that they are aware of the liquidity issues and the stablecoin depeg because Stablecoin Universal was experiencing a liquidity issue.

In under 24 hours, the HUSD dollar peg was restored. At the time of writing, it is trading at almost 1:1 to the US dollar.

Recently, we had made the decision to close several accounts in specific regions to comply with legal requirements, which included some market maker accounts. Due to the time difference in banking hours, this resulted in a short-term liquidity problem but has since been resolved.
— HUSD (@Stablecoin_HUSD) August 19, 2022

HUSD just announced that due to compliance issues in certain regions, they had to close down a few accounts which resulted in short-term liquidity problems.

FTX may have seen this coming as 17 days ago they just removed HUSD from its own USD basket. User’s HUSD deposits will not count towards their USD balance on FTX.

Also Read: Genius or Destructive? MakerDAO Founder Plans To Depeg DAI Stablecoin

[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]

Featured Image Credit: Forkast