The price of Tron (TRX), the 18th-largest token by market capitalization, experienced a significant drop on Friday amid tensions at crypto exchange Huobi, where Tron founder Justin Sun sits on the advisory board.
Huobi announced that it will cut headcount by 20% and require employees to take their salaries in stablecoins, and has also closed internal staff communication channels in an attempt to quell a rebellion.
As a result, the Tron-based stablecoin USDD fell 3 cents, effectively losing its intended peg to the US dollar. This caused the value locked on Tron-based decentralized applications to fall by 2%, according to DeFiLlama data.
In addition, $50 million was reportedly moved from crypto wallet addresses linked to Sun to exchange Binance.
There have been concerns about the overall health of Huobi and the safety of customer funds, with $60 million in outflows from Huobi reported over the past 24 hours. The drop in TRX price and depegging of USDD also led to under $1 million in liquidations on exchanges for TRX futures, indicating that the selling was mostly spot-driven.
Spot refers to actual tokens, while futures are derivative financial instruments that allow traders to bet on the prices of the underlying tokens.
Overall, the price of TRX fell nearly 8% in the past 24 hours, with the token currently hovering above a support level of 5 cents. If it drops below this level, the tokens could potentially slip to as low as 3 cents, according to price charts.
Huobi's native HT exchange tokens have also lost as much as 11% in the past 24 hours. Tron, Huobi, and Sun have not yet responded to requests for comment from CoinDesk.