The complexity of reserves of HTX, coupled with recent security breaches, adds a layer of severity to the apprehensions raised.
Proof-of-reserves is a method supplied by HTX, formerly referred to as Huobi. The purpose of this mechanism is to provide consumers with confidence that the exchange is equipped with the requisite assets to operate as a solvent exchange.
It went so far as to guarantee that an impartial third party would at one point examine the proof-of-reserves process.
It was subsequently acknowledged that this was not the case, and the corresponding statement read: “We have partnered with a third party since the announcement was released; however, no third party is capable of carrying out this task.” Is it true that there are no third parties involved in this context?
Involvement of HTX in USDD Algorithmic Stablecoin Reporting
A deplorable development is that HTX’s reporting for the USDD algorithmic stablecoin appears to have included “collateral.” This may be one of the contributing factors to the non-involvement of third parties in the arrangement.
The purpose of the software application developed by HTX is to enable third parties to authenticate the company’s claimed ownership of the assets in question. The principal objective of the software instrument is to achieve this.
Since its most recent update at the start of December, the “snapshot” has included the Tron network’s address: TZ1SsapyhKNWaVLca6P2qgVzkHTdk6nkXa. The sampling was inclusive of this address.
Furthermore, this particular address is enumerated among the “reserve accounts maintained by the TRON DAO Reserve” for the algorithmic stablecoin USDD. The data mentioned above is accessible via the TRON website.
Based on the provided information, it can be inferred that the assets located at this address are being utilized as assets for HTX and collateral for USDD at the identical location.
The assertion that “the TRON DAO Reserve manages” this account is an additional element that adds to the intricacy of this topic. Throughout our inquiry into the USDD governance module, we have developed the understanding that only a solitary proposition has ever undergone a vote.
This proposal does not seem to provide any assurance that the collateral presently held by this DAO will be deposited at HTX throughout the transaction.
Additionally, it should be noted that the HTX proof-of-reserves gives rise to various issues that become apparent within the Sun ecosystem. One of the challenges it faces is the substantial volume of staked tethers (stUSDT) under its control.
Although a small portion of the remaining Sun-controlled project is allocated to other purportedly Sun-controlled areas, HTX ultimately receives most of this investment. Including approximately $402 million worth of stUSDT in the platform’s total balance of $475 million, USDT is an additional factor contributing to this situation’s complications.
Based on this data, it is possible to conclude that this product contains around 85% of the total tethers available on the platform.
Based on the HTX Proof-of-Reserves, it is possible to conclude that the cryptocurrency exchange possesses assets with an estimated value of $475 million, with user assets amounting to $470 million.
Several obstacles are presented by the HTX Proof-of-Reserves, including the incorporation of WBTC on Tron. Nevertheless, Poloniex has informed us in advance that it cannot disclose the Bitcoin addresses comprising the security deposit for this token. Even though Poloniex supplies this product, this is the case. Sun is the owner of the cryptocurrency exchange Poloniex.
Presently, more than 45 percent of all Bitcoin transactions that occur on HTX are attributed to this “wrapped” form. Now, as indicated by the proof-of-reserves, HTX holds 21,842 Bitcoins, a substantial amount more significant than the 21,820 user assets that the user currently possesses.
Although these Sun-connected products constitute a significant portion of HTX’s reserves, they give rise to substantial apprehensions regarding the quantity and quality of assets held at this exchange. Due to a recent malicious breach, these concerns have acquired even greater severity.