Huobi explains what went wrong with HUSD — now back on track

Huobi explained what was wrong with HUSD, namely that the company disclosed the cause of short-term liquidity difficulties, and assured consumers that the problem was fixed when the HUSD stablecoin was pegged to the U.S. dollar.

HUSD started to depreciate against the U.S. dollar on Thursday, opening at $0.92 before falling to $0.82 a few hours later. This spooked community members, who speculated about what would have happened if the stablecoin’s dollar peg did not recover.

Huobi explains what went wrong with HUSD

In response to these concerns, the cryptocurrency exchange immediately said they had contacted stablecoin issuer Stable Universal Limited and were working to restore stability. The ethereum-based stablecoin nearly regained its peg to the U.S. dollar before the day’s close, trading at $0.99 per HUSD before returning to $1 on Friday.

According to the HUSD team, the unpegging was triggered by a move to terminate market maker accounts in specific countries to comply with the law. The team said that the time difference in bank hours created the gap, leading to a liquidity crisis that caused HUSD to drift away from its peg.

Huobi then informed its customers in an announcement that the issue was fully resolved and asked its users to pay close attention and be aware of any potential dangers posed by market volatility.

Acala Dollar News

Meanwhile, the $1 billion Acala Dollar (aUSD) attack resulted in a 99% decoupling of the stablecoin. In response to the attack, the Acala team locked the hacker’s wallet, casting doubt on the platform’s promise of decentralization. The team was finally able to get back a sizable portion of the uncollateralized tokens.

The USDD stablecoin also lost its peg to the U.S. dollar in June, when a fund leveraging the TerraUSD (UST) depeg began a massive transfer of large amounts of USDD. However, the decoupling was short-lived as the Tron DAO reserve amassed $700 million in coins (USDC) to protect the peg.

In other Huobi news

More recently, Postcoin has put a stop to derivatives trading in the country of New Zealand. It made the decision after a surge in the variety of Crypto goods sold on the exchange. Huobi announced that the ban will take effect next week. This is confusing to users in New Zealand, especially since it happened shortly after the company received official authorization to do business in the country.

Source of information: compiled by 0x information from DCFORECASTS, the copyright belongs to the author Stefan, and may not be reproduced without permission

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