HTX advisor Justin Sun is currently engaged in a dispute with former Huobi owner Li Lin over whether or not Huobi/HTX had a $30 million hole in its books when it was sold to About Capital Management in 2022.
The dispute is the latest chapter in the pair’s years-long feud.
A machine translation of a recent X post by Sun includes a story in which he accuses the Huobi founder of concealing the hole, leading to Sun having to loan money to the exchange.
A statement purportedly from Li has been posted to X in which he claims that Sun is misrepresenting the state of the exchange at the time of purchase and says that the hole that Sun is describing was a margin call that the exchange believed could still be recovered.
The statement also mentioned that the exchange’s revenue had already covered the hole.
Sun appeared to respond to this claim by claiming that Li has previously indicated that the $30 million will be returned to him.
Li Lin and Justin Sun’s Name Dispute
Li and Sun’s dispute started shortly after the sale of Huobi.
In a lawsuit, Li claimed that About Capital Management didn’t have the right to use the Huobi brand after the exchange and its assets were acquired. The court eventually ruled that the exchange couldn’t use the Huobi name.
Read more: Justin Sun-advised HTX plays games with its reserves
The suit was filed after Sun claimed that Li’s brother, Li Wei, had engaged in conflicted transactions in Huobi Token, noting his belief that Li Wei had “received millions of HT tokens for free.”
Justin Sun probably owns HTX
The dispute is strange in part because Sun has pretended that he doesn’t own HTX. He’s insisted that he’s only an advisor who just happened to own a large stake in Huobi Token (now HTX token), and that’s why he agreed to work with the exchange.
However, it seems obvious at this point that Sun has a vested interest in HTX, loaning the exchange millions of dollars and holding the reserves for the stablecoins he pretends are decentralized. He has also been the face who’s promoted every major development for the exchange since About Capital Management acquired it.
Worryingly, HTX’s proof-of-reserves shows that the exchange relies on assets that aren’t completely trustworthy. These include a Poloniex-issued tokenized bitcoin asset that won’t reveal its reserves, large stakes of Sun-affiliated Staked Tether, and Staked Ether.
Additionally, further undercutting his claims that he doesn’t own the exchange, Sun reportedly attempted to sell his majority stake in Huobi to Binance.
