- WhiteBIT has reportedly displayed red flags related to the crypto assets held on behalf of customers.
- The crypto exchange reportedly has questionable ties to Justin Sun and his Huobi exchange.
- WhiteBIT’s abnormally high APYs on crypto assets have raised concerns about its liquidity.
Lithuania-based crypto exchange WhiteBIT raised eyebrows among the crypto community over the past few days for advertising abnormally high Annual Percentage Yields (APYs) for crypto assets on its platform. Crypto experts also pointed out suspicious transactions between WhiteBIT and Huobi Global, the crypto exchange led by Tron founder Justin Sun.
According to a recent report, the annualized interest rate for Tether USD (USDT) on WhiteBIT was 24.8%. The rate was significantly higher than the industry standard, given that other centralized crypto exchanges offer roughly a fifth of the APY on that stablecoin. WhiteBIT also offers an APY of 23.19% for leading cryptocurrencies like BTC and ETH. A high APY is believed to be indicative of a shortage of funds or similar liquidity issues at an exchange.
Data from on-chain analytics firm Arkham Intelligence revealed further red flags surrounding WhiteBIT. The exchange had a remarkably high number of transactions with Sun’s Huobi exchange on a regular basis. The Tron founder gained a reputation of touting exponential returns on US Dollar pegged stablecoins including USDD (150% to 392%), USDJ (2366%), and TUSD (23%). Interestingly, the Sun controls a significant portion of these stablecoins’ supplies.
Huobi Global’s deposit address ranked second on the list of crypto addressees with frequent transactions on WhiteBIT, with transactions between the crypto exchanges exceeding $1.39 billion. Huobi was also the top counterparty, having more than $17 million in withdrawals through Sun’s Tron network over the past 24 hours.
Data from CoinMarketCap showed that WhiteBIT had a trading volume of $367 million over the past 24 hours. The crypto exchange’s total assets came in at $1.6 billion, however, $1.59 billion of these were held in the form of its native token, WhiteBIT Coin (WBT). WBT was sold in August last year through an initial coin offering (ICO) and was listed on only 5 exchanges at the time of writing.
