Justin Sun-advised HTX plays games with its reserves

HTX, formerly Huobi, is an exchange deeply connected to controversial crypto entrepreneur and trader Justin Sun, and its activities raise concerns about solvency and Sun’s effective control of user assets.


While Sun denies controlling HTX, he’s previously admitted to being an ‘advisor’ and the business itself has previously described him as its leader. 

It appears that the acquisition of Huobi by About Capital Management in 2022 — a move that coincided with Sun’s appointment to the Huobi Global Advisory Board — marks the point at which his relationship with the exchange started to deepen.

Even the rebranding of Huobi to HTX may have been connected to this change in ownership, with the former owners, New Huo Tech and HBIT, openly denying connections to Huobi online and threatening lawsuits against the exchange for continuing to use the name. 

Additionally, Sun has reportedly attempted to sell his stake to Binance, and he claims that he owns a majority stake. 


Staked Tether (stUSDT) is a Sun-connected project that purports to invest USDT into yield-generating activities like purchasing United States treasuries.

Read more: Justin Sun’s empire may be on the verge of collapse

This asset’s marketing claims that it’s controlled by an entity called the Real World Asset Decentralized Autonomous Organization; however, Protos has been unable to find any decentralized or autonomous governance structures for this project.

We’ve reached out to stUSDT to determine if there’s a governance structure we missed and to ask for comment on whether it feels that it’s adequately decentralized and autonomous to refer to itself as a DAO. At press, it has not responded.

On Tron, 88% of this token is held in TDToUxX8sH4z6moQpK3ZLAN24eupu2ivA4, an HTX address.

On Ethereum, over 96% of the total supply of this token is held in 0x176F3DAb24a159341c0509bB36B833E7fdd0a132, an address labeled as ‘Justin Sun’ on Etherscan.

More troublingly, a review of the HTX proof-of-reserves reveals that much of the USDT on the exchange has been replaced with stUSDT. HTX claims in its proof-of-reserves (which it falsely describes as an audit) that it has $610 million worth of USDT. 

However, utilizing the tool HTX distributes to verify its proof-of-reserves, we can determine that the category described as ‘USDT’ actually contains other assets, including $460 million worth of stUSDT, representing approximately three-quarters of all USDT on the exchange.

Analysis of USDT on HTX based on Proof-of-Reserves.

Additionally, the USDT category includes $79 million worth of Aave Ethereum USDT, representing funds deposited into the Aave lending protocol.

Even more troubling may be the nearly $12 million USDT held as jUSDT, which is USDT deployed into the JustLend protocol on Tron.

These activities raise serious concerns about the quality and safety of USDT reserves on HTX.


USDD is a Sun-affiliated protocol that describes itself as an ‘algorithmic stablecoin’ despite the lack of any real algorithm or way to redeem the token once issued.

It’s supposedly governed by a decentralized autonomous organization (DAO), the TRON DAO Reserve; however, Protos has only been able to identify a single proposal that the DAO has voted on

Read more: Justin Sun’s empire crumbles as USDD depegs again

Even more troubling is the fact that a significant portion of the reserves, approximately $125 million worth of TRX, are stored in TZ1SsapyhKNWaVLca6P2qgVzkHTdk6nkXa, which is also included as an address involved in HTX’s proof-of-reserves.

This means the TRX tokens in this address are counted both as assets for HTX and as collateral for USDD. Furthermore, there are no governance proposals in the TRON DAO Reserve discussing the decision to store these assets at Sun-affiliated HTX.

WBTC on Tron

Wrapped Bitcoin on Tron (WBTC) is a product that was offered by Sun-owned Poloniex, that purported to transform bitcoin into a token that can be used on Tron.

Poloniex doesn’t publicly disclose where it stores the reserves for this product and it’s been unwilling to share them with Protos when we have reached out previously. Furthermore, Poloniex has since delisted the asset after a depeg, making it unclear if anyone can redeem it through Poloniex.

Despite the many issues with this asset, a review of the HTX proof-of-reserves reveals that of the 25,735 bitcoins stored on HTX, a total of 14,108 — more than half of the total — are this wrapped version with no transparency.

Analysis of BTC on HTX based on Proof-of-Reserves.

Read more: Binance banned Tron Foundation for market manipulation, report


A significant portion of the Ethereum on HTX is actually Lido Staked Ether (stETH) and ether bridged to the HTX-affiliated HECO Chain.

HTX’s proof-of-reserves reports a total of 92,630 ether on the exchange, but the vast majority of that is the 52,103 stETH and the 37,043 ether bridged to HECO Chain. There are a paltry 3,484 traditional ether on HTX.

Analysis of ETH on HTX based on Proof-of-Reserves.

HTX Token

Even when Sun was trying to downplay his influence over HTX, he was still willing to admit that he owned a large quantity of the Huobi Token.

Recently, the Huobi Token was somewhat converted to the HTX token, with a partial conversion being offered to Huobi Token holders. This conversion frustrated many holders, especially since it seemed to fulfill many of the same functions as the previous token but wasn’t offered as a direct 1:1 upgrade.

Less than 20% of the total HTX token supply was reserved for previous Huobi Token holders.

HTX token is purportedly governed by the HTX DAO. However, the ‘community autonomy’ for the DAO is still listed as ‘coming Soon.’ Weakening the argument that this will be the case is the fact that portions of the documentation and FAQ for HTX DAO are hosted on HTX. 

Furthermore, tokens were previously ‘unlocked’ by performing various activities on HTX, including hitting certain trading volumes.

Other concerns

HTX was hacked last year but is still lying about it, falsely claiming to Protos that “the platform has never had any security incidents in the past 10 years.” Even when pressed, and previous disclosures of the hacks were highlighted, HTX continued to lie and falsely claim that no security incidents had occurred. 

Additionally, HTX-affiliated Heco Chain was also previously hacked. Sun claimed that HTX would be able to fully cover these losses.

Assets from HTX are being used across a wide variety of Sun-connected protocols and entities, and the vast amounts of USDT and BTC removed raise concerns about both the quantity and quality of assets at HTX.

These issues with the assets at the beleaguered exchange are only one part of the picture, with Sun additionally facing a lawsuit from the Securities and Exchange Commission that alleges he engaged in wash-trading and market manipulation.

Protos has reached out to HTX with questions about its reserves but at press it has not responded.

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