Justin Sun’s Huobi-linked exchange, WhiteBIT, raises concerns over its lending platform.

Justin Sun's Huobi-linked exchange, WhiteBIT, raises concerns over its lending platform.

The Blockchain Industry: An In-Depth Look

Image Source: CNBC

An obscure exchange with connections to Justin Sun, WhiteBIT, has sparked concerns after advertising a staggering Annual Percentage Yield (APY) of 24.8% to users depositing Tether (USDT) for a year on its lending platform, Protos reported. This alarming rate is five times higher than the average USD money market rate, raising a glaring red flag for potential investors.

WhiteBit’s Connection With Huobi

The exchange has established connections to Justin Sun and his Huobi exchange, with funds flowing frequently between WhiteBIT and Huobi. This affiliation might explain the high APY figure, yet it offers little reassurance to those considering investment. Justin Sun, a well-known figure in the cryptocurrency industry, has a history of promoting exorbitant returns on dubious stablecoins. For instance, he has touted returns ranging from 150% to 392% on his USDD stablecoin, 2,366% on USDJ, 30% on USDC, and 23% on TUSD. Therefore, this history of extravagant promises combined with WhiteBIT’s connection to Sun underscores the need for cautious evaluation.

WhiteBIT doesn’t just offer a range of over 150 cryptocurrency trading pairs, but it also supports two lesser-known fiat currencies, the Ukrainian hryvnia and Kazakhstani tenge. However, the most eye-catching feature is its ‘lending’ platform, which boasts interest rates exceeding 24.8%.

While higher interest rates generally indicate elevated risks, WhiteBIT has recently reported holding $1.59 billion in digital assets, with its own ICO token, WhiteBIT Coin (WBT), accounting for a significant portion. Despite these figures, it seems implausible that users would choose to hold 99% of their assets in WBT, raising questions about the token’s legitimacy and its impact on the exchange’s overall credibility.

WhiteBIT’s access to fiat on- and off-ramps, particularly within Ukraine and Kazakhstan, could be considered its most valuable asset. The ability to convert stablecoin proceeds to fiat within these regions is a rare advantage. Furthermore, the availability of a Ukrainian or Kazakhstani checking account with a U.S. correspondent banking relationship is even scarcer, making WhiteBIT’s capabilities noteworthy.

WhiteBIT Faces Challenges Maintaining Licenses

WhiteBIT has faced challenges in maintaining licenses and banking relationships over the long term. Its two European licenses from 2019 have encountered 404 Not Found errors, and the exchange has experienced multiple delays in withdrawals, potentially raising concerns about its stability.

Despite these complexities, WhiteBIT’s co-founders lack experience as crypto executives. Vladimir Nosov, listed as the CEO, has limited information available on his LinkedIn profile, while David Tunian’s prior role seems to involve sales rather than executive leadership.

While the exchange claims to have supported events like the Eurovision 2022 trophy and Ukraine’s military efforts, its practices and affiliations warrant closer inspection.

In conclusion, WhiteBIT exchange’s connection to Justin Sun, its alluringly high APYs, and its unorthodox practices demand careful scrutiny. While it presents itself as an avenue for cryptocurrency trading and lending, its history, affiliations, and offerings raise valid concerns for potential investors. Being knowledgeable and cautious is vital in the blockchain industry to make informed investment decisions.

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Bitcoin

HTX Crypto Exchange Bounces Back in Style

HTX crypto exchange resumes Bitcoin transactions after recovering from $30 million hot wallet hack.

DeFi

Justin Sun's platform, Poloniex, was hacked for over $100 million. The hackers then bought TRX, causing its price to skyrocket.

Poloniex lost over 114 million USD to a hacker attack, with the hacker using the stolen funds to purchase TRX, causin...

DeFi

Curve's value increases by 22% as the founder sells CRV tokens to repay an Aave loan.

Curve experiences significant growth, with a 22% increase, thanks to the founder's successful sale of CRV to influent...

BlockChain

Poloniex Hack Reveals the Hilarity and Horror of Crypto Exchanges

Investor Justin Sun of Poloniex has confirmed an exploit and has taken action to reimburse affected users. He has als...

Policy

New name HTX raises eyebrows in Huobi community

Huobi is excitedly marking its impressive 10th anniversary by embarking on a bold marketing campaign – a rebranding i...

DeFi

Crypto exchange HTX gets raided for $258M, investors sprint for the exits

Fashionista readers, take note Popular cryptocurrency exchange, HTX, has experienced a significant $258 million decre...