By Evan Spicer
Director of Cryptocurrency Investigations
The biggest news in the crypto sector recently has been the failed FTX-Binance deal and the resulting FTX collapse. It seems that FTX’s activities resembled those of a crypto scam. What does the downfall of FTX mean for the rest of the crypto sector, including exchanges like Huobi?
Would a Successful FTX-Binance Deal Have Hurt Huobi?
At first blush, someone could conclude that the dismantling of the hasty yet unofficial FTX-Binance deal and the FTX collapse would be a boon for other crypto exchanges.
Huobi is the 20th largest crypto exchange worldwide by volume. This doesn’t make it one of the top players, but it certainly could have become dwarfed by a merger between FTX and Binance. The news that this deal crumbled and FTX out of the picture, even exposed as little better than a crypto scam, might seem, theoretically at least, to help Huobi and other smaller exchanges.
However, this is far from the case. Crypto experts have rightly predicted that the FTX collapse will be catastrophic for the entire crypto market. In fact, some are calling it a “Lehman moment” recalling the fall of the iconic Lehman Brothers financial services firm as a pivotal moment marking the acceleration of the banking crisis of 2007-2008.
How the FTX Collapse Impacts Huobi
This may seem to fly in the face of logic. After all, when a competitor falters, doesn’t that strengthen those still standing? Can’t Huobi take on FTX customers and capture market share? That is what they are trying to do, but they will suffer losses from FTX’s collapse, probably more losses than gains.
On closer inspection, when we realize how interconnected these crypto exchanges are, we realize that an FTX collapse sinks all ships.
The fact that Binance was so quick to try to rescue FTX with an unofficial FTX-Binance deal demonstrates how linked these crypto entities are. Binance had to quickly divest itself of FTT tokens used on FTX to reduce its losses with the FTX collapse.
It seems now that FTX customers will need crypto recovery to get their funds back. As with many crypto scams, FTX can’t pay withdrawals because it was busy shuffling funds back and forth from FTX and Alameda Research, FTX owner Sam Bankman-Fried’s hedge fund.
The inability to honor withdrawal requests led to FTX filing for Chapter 11 bankruptcy. Now its customers will need to get bitcoin chargebacks and it is uncertain how their crypto recovery claims are going to bear fruit.
Why Huobi-Linked Entities May Need Crypto Recovery
Huobi linked entities are among the many FTX clients that are seeking crypto recovery. New Huo Technology, formerly known as Huobi Global, has $18.1 million funds stuck in FTX. Of this amount $13.2 million is composed of customer deposits and $4.9 belongs to a Huo Technology subsidiary, Hbit.
Li Lin, founder of Huobi, has promised to bail out Huo Technology to the tune of $14 million while they pursue crypto recovery from FTX. If it weren’t for the bailout, Huo Technology customers would have to seek bitcoin chargebacks from the company that, in turn, has a crypto recovery claim against FTX, which is filing for bankruptcy.
Crypto Scams and the Tangled Web of Exchanges
Looking at the interconnectedness of crypto entities, it’s clear how one incident like the failure of the FTX-Binance deal and the FTX collapse can bring down the entire crypto market. The customers end up paying the price and need crypto recovery as their exchanges stumble to get funding to cover their own losses.
Do You Need Crypto Recovery? Here’s What You Have to Do
If your crypto exchange or bitcoin broker isn’t letting you make withdrawals, is making excuses or charging you huge fees, you may be dealing with a crypto scam. It’s important to demand a withdrawal. If this isn’t granted, file a complaint and seek crypto recovery and a bitcoin chargeback.
Don’t go it alone in the path toward crypto recovery. MyChargeBack will consult with you and analyze your case. We’ll give you guidance and launch a full investigation. With crypto forensics and advanced technology, our experts will create a crypto report that you can bring to law enforcement. These reports will bolster your claim and improve your chances of successful crypto recovery.
Need Crypto Recovery? Talk to MyChargeBack Experts Today!
If you have lost money to financial fraud, talk to the MyChargeBack team. Our crypto investigations will provide evidence to bolster your claim and get you started with fund recovery.
MyChargeBack has developed working relationships with law enforcement agencies worldwide, has extensive knowledge and experience with crypto tracking, and can improve your prospects of getting your funds back