The price of Huobi Token (HT) has plummeted in a few minutes by more than 93% on the platform and went from $4.6 to $0.3.
After recovering, the asset is trading near the $4 level, having lost about 20% over the past day.
Tron founder Justin Sun has said this sharp drop and the asset's rebound is due to the "liquidation of leveraged positions" of several users, which has caused a cascading effect in the spot and derivatives markets.
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However, he has assured that the platform's wallets, assets and back-end are safe.
Sun has also announced the creation of a $100 million fund to strengthen Huobi's liquidity. Approximately two hours later, Sun has confirmed the transfer of $100 million USDC.
Sun has stated:
"We will continue to improve the liquidity depth of main cryptocurrencies and HT token, strengthen leverage risk warnings and liquidity capabilities. Regarding this incident, we will keep the community updated on the follow-up progress."