[SERIOUS] 50% of Justin Sun’s Huobi Reserves Are Made Up of HT and TRX Tokens That Are Centrally Controlled By Sun and Huobi

To clear up any misconceptions early, the founder of Huobi was set to sell 100% of his stake in Huobi. Justin Sun bought what is likely some significant part of the stake if not 100% of it. Officially, he describes himself as an 'global advisor' yet there are many reports of him making very powerful and sweeping changing at the firm, such as taking control of and overhauling entire departments that are of significance. SBF was also rumoured to be involved in the deal as taking part in discussions and meetings. There were also reports that he set on firing significant amounts of staff that were later 'denied' by Huobi but they still said to be possible. Many of the execs left also when Justin came into his management powers. This is also why HT was included in the list of Sun-owned tokens involved in the FTX credit facility allowing FTX users using Sun-owned tokens to withdraw after FTX fell apart, another hint of deeper ties between SBF and SBF.

Now, Huobi published their asset transparency report which is basically a preliminary publishing to their proof of reserves. As is the case with an alarming number of exchanges, their proof of reserves is only a snapshot, after which funds can be liquidated, shifted or manipulated any way they like if they so choose. Regardless, the reports paints a strange picture.

50% of the funds in Huobi reserves are made up of TRX(~15%) and HT(~35%) tokens. This may pose several issues.

1. How much of user funds are actually backed fully and how much is made up of printed TRX and HT tokens?
2. This high percentage is made up of exchange controlled funds can be indicative of another 'FTT infinite money scheme'. Sun himself admitted he owns 'tens of millions of HT', likely in addition to what is held on Huobi. With an market cap of only around 700 million, he controls a very significant portion of HT such that a scheme like this is very profitable, and feasible, for him. Him mimicking SBF's FTX-Alameda-similar situation is not all that unlikely as I already pointed out the links between SBF and Sun.
3. Such a high percentage of exchange controlled funds can lead of ease of market manipulation. Especially between the HT controlled by Sun and Huobi itself, Sun effectively can control prices however he likes. We also saw Sun's willingness to do just this as in the FTX credit facility when they blocked deposits of Sun-owned tokens leading to prices rising as high as 4000% above the market price as users desperate to withdraw bought these tokens at any price. Sun(and SBF) also deliberately caused the price spike by limiting token liquidity injection to $13M(supply) when there were about $9B(demand) stuck on FTX. Sun made a killing off of this, as of course HE could withdraw his profits but other users couldn't.
4. If user funds do happened to be fully backed, why do exchange-controlled tokens represent half of its reserves? At worst, this bodes of manipulation/fraud and even at best it represents a HUGE single point of failure for Huobi. A fall in price in either token could have disastrous consequences.

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Additional to point 1, I can see Sun using customer funds to buy his own tokens to pump his own bags of the many HT and TRX tokens he owns, such that they may have the capital value of the backing but not actually hold the 'physical' coin reserves. But of course, this is just speculation right.

Huobi also abandoned their own stablecoin HUSD(issued by Stable Universal) early this year. More recently, they delisted the token and it depegged all the way to $0.15. This is planned to be replaced by Sun's USDD. Sun's DAO Tron in February named SBF's Alameda Research a whitelisted institution permitting Alameda the rights to mint and the right to burn USDD as well as act as advisor and recommender to the network. Just another of the Sun-SBF ties.

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Tldr: Clearly, (as pointed out in point 4), this is a terrible sign. Justin Sun does not have a great track record so in the worst case this cause mean some deep manipulation/fraud. Even in the best case giving the greatest benefit of the doubt it is still terrible to have such a heavy reliance and dependence on the two tokens alone. This situation doesn't look good at all.

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https://www.bloomberg.com/news/articles/2022-10-14/crypto-s-justin-sun-says-he-owns-tens-of-millions-huobi-tokens

https://wublock.substack.com/p/exclusive-the-real-buyer-of-huobi

https://blockworks.co/huobi-stablecoin-plunges-70-as-justin-sun-readies-tron-replacement/

https://blockworks.co/news/crypto-moguls-compete-for-huobi-majority-stake-report

https://cointelegraph.com/news/huobi-global-denies-large-scale-layoffs-and-key-exec-resignations