The once-popular HUSD stablecoin took a tumble after crypto exchange Huobi announced Friday that it was delisting the asset. It dropped dramatically from its $1 stable following the Delist news. It fell to 28 cents. This brought to mind the LUNA case, which hit the stablecoin and cryptocurrency market. Here are the details…
Huobi delisted HUSD
Huobi said that users can exchange their HUSD tokens for the largest stablecoin, Tether (USDT). Stablecoins usually reflect the value of fiat currencies such as the dollar, pound or euro. The stablecoin industry was rocked earlier this year after the collapse of Terra USD (UST), which caused the entire Terra ecosystem to explode. HUSD, issued by Stable Universal, also had problems earlier this year when it began to drift away from its stable price.
Meanwhile, as we reported on Cryptokoin.com, Tron founder Justin Sun has taken on a senior role at Huobi in recent weeks. One of the sudden changes it made was to shift volume to its stablecoin, USDD. While Huobi did not issue HUSD itself, it has been active in the marketing of the token since its launch in 2018. HUSD is currently down significantly from its all-time high of over $1 billion in 2021. Currently, it has a market cap of just $63 million.
The LUNA case: What happened?
So, what does delisting HUSD and leaving the dollar constant have to do with LUNA? In Terra’s ecosystem, UST, an algorithmic stablecoin, broke from its $1 stablecoin in May as a result of certain sales. After this situation, LUNA, which was formerly among the top 10 cryptocurrencies by market value, lost 100 percent of its value. Designed to hold steady at $1, the UST bottomed out at 13 cents. This has affected individual and institutional investors. For example, according to the latest reports, Singaporean cryptocurrency platform Hodlnaut has lost around $190 million due to its UST investment.
A recent report reported that Hodlnaut converted some of its crypto assets to UST earlier this year. As a result of stablecoin falling to almost zero, the firm lost about $190 million. The Singaporean entity seems to be hiding the truth for some time now. Reports revealed that Hodlnaut deleted more than 1,000 “key” documents that could show his investment. Hodlnaut suspended withdrawals, deposits and token swaps in August due to “difficult market conditions”.
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