The stablecoin of crypto exchange platform Huobi briefly de-pegged from the US dollar due to liquidity problems.
The stablecoin, HUSD, dipped to as low as $0.87 before its liquidity crisis was resolved in just a few hours and it regained its peg.
It is trading for $0.996 at time of writing, an 11% gain on the day.
According to a statement made by the stablecoin, the issue was caused by their decision to close specific accounts, including market maker accounts, as a means of complying with regulations. HUSD says that time differences in banking hours were the culprit.
“Recently, we had made the decision to close several accounts in specific regions to comply with legal requirements, which included some market maker accounts. Due to the time difference in banking hours, this resulted in a short-term liquidity problem but has since been resolved.”
The crypto exchange platform quickly sprung to action, saying they would work with the coin’s issuer, Stable Universal Limited, to resolve the liquidity problems bogging down HUSD.
“We are aware of the current liquidity issues associated with the HUSD stablecoin, which is issued by Stable Universal Limited and built on the Ethereum network.
Huobi has always prioritized the safety of our customers’ assets, and will work together with HUSD’s issuer to find a solution and restore its stability as soon as possible.”Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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Featured Image: Shutterstock/Cristina Conti