Chinese cryptojournalist Colin Wu, known on X (Twitter) as Wu Blockchain, has expressed concerns about the liquidity of the WhiteBIT exchange and its high interest rates on Tether deposits due to its ties to Tron founder Justin Sun.
Wu Blockchain believes that the exchange could run out of funds, and the problem is its high interest rates. In addition, Huobi's deposit address is one of the most common addresses to exchange funds with WhiteBIT.
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Recently, the popularity of the WhiteBIT exchange has skyrocketed due to the high annualized interest rates on Tether (USDT) deposits. The exchange offers a rate of up to 24.8%, which is five times the market average, according to Pgotos.
According to Arkham Intelligence, WhiteBIT holds more than $1.59 billion in digital assets, $1.58 billion of which is held in the exchange's service token, WBT. Many experts have expressed disbelief that WhiteBIT clients hold 99% of their assets in WBT. It is worth noting that WhiteBIT confirms the reliability of the information.
Many experts also pay attention to the close relationship between WhiteBIT and Justin Sun.
Funds are frequently transferred between WhiteBIT and the Huobi exchange, which Justin Sun acquired in October 2022. A possible reason for these transactions is the high interest rates offered.
Previously, Justin Sun has repeatedly advertised profits from 150% to 392% on his USDD stablecoin, 2366% on USDJ, 30% on USDC, and 23% on TUSD.
Wu Blockchain believes that when an exchange offers high returns, there may be a shortage of funds. In addition, Huobi's deposit address ranks second among addresses with frequent fund exchanges with WhiteBIT, and the fund exchange between the two has exceeded $1.39 billion.
Further reading: Binance closes access to some currency pairs with BUSD.
