There may be a subtle problem in WhiteBit Exchange's paradise, according to a recent
report from Protos that indicates the possibility of bankruptcy in the brokerage firm. Per the Protos report, WhiteBit, which maintains a deep connection with Justin Sun's Huobi exchange, is offering its users a mouthwatering incentive of 24% APY should they deposit USDT for a one-year period.
The report has it that such a bogus reward scheme is explored when the exchange is rid of liquidity to continually power its smooth operations. The connection between WhiteBit and Huobi has been linked to regular massive
transfers of funds between both exchanges, as well as the uniformity in the massive rewards associated with Justin Sun-linked stablecoins.
The Protos report underscores a major concern about WhiteBit, whose liquidity is predominantly domiciled in its native token, WBT. The exchange has maintained a claim that 99% of its users choose to keep their token in WBT, a possibility the report noted is very low.
There are other red flags that point at the fact that WhiteBit may not be as operational as it presents itself to be. Besides the obvious pointers, the trading platform is also known to delay withdrawals.
Huobi's illiquid sentiment
Huobi exchange is one of the prominent brokerage firms serving users in the industry but one with many unanswered questions about its sustainability and viability. The suspicion of lack of liquidity made the rounds earlier this month when it was discovered that the amount it holds in its reserve is less than what it quoted to its customers.
The little scare has forced a bout of panic-selling on Huobi, with a top Dogecoin developer even
advising HODLers to move their assets away from the exchange. While Justin Sun has debunked the
news of insolvency and Huobi has taken
emphatic steps toward recovery, some of the most important questions regarding WhiteBit and Huobi remain unanswered.
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