Is this the end of Huobi?

TL;DR: Crypto exchange Huobi is showing signs of internal distress, it causes its customers to panic, even though the exchange's representatives communicate confidence and stability.

It looks like Huobi, the cryptocurrency exchange that's headquartered in Seychelles, is going through a tough time. Reports are coming in that the company is laying off a significant portion of its staff, which apparently caused some serious internal strife. And the portion in question is 20% of their entire workforce which, reportedly, is 1,100 employees.

In fact, things are reportedly so heated that Huobi has had to close employee communication groups and feedback channels in an attempt to keep the peace.

Huobi founder Justin Sun has issued a statement in response to the reports.

He confirmed that the company is indeed making layoffs, but said that they are part of a "structural adjustment" and that the exchange has actually been doing quite well, with an average of 20,000 new users in the last three months.

Sun also addressed concerns about Huobi's solvency and reserves, stating that the company is just going through some "short-term pains" that will ultimately bring advantages to the exchange.

Despite Sun's assurances, it appears that the news of the layoffs and internal turmoil is having an impact on Huobi's exchange token and trading volume.

Huobi's HT token saw a drop of nearly 11% in the past 24 hours, but has since recovered and is currently trading at a similar value to before the reports of layoffs emerged, though it is still at a lower price than a week ago.

It appears that the exchange has seen a significant outflow of funds in recent days, with $85 million withdrawn in the last 24 hours and $135 million withdrawn in the past 7 days. According to additional rumors, Huobi has also cancelled year-end bonuses and insisted the salary payments for employees would be done in stablecoins (USDC, USDT) instead of fiat.

This has, reportedly, caused protests and pay disputes among the staff. Understandable. Despite the negative news and the impact on the HT token, Justin Sun is calling for everyone to ignore the FUD and stay calm.

It remains to be seen how the situation at Huobi will play out, but for now, it seems that the exchange is facing some serious challenges.