The stablecoin HUSD, issued by Stable Universal on August 18, fell to 92 cents due to liquidity issues.

Ethereum-based stablecoin HUSD is backed by a $1:1 reserve. As Huobi cryptocurrency exchange representatives explained in a ForkLog comment, the pair loss preceded the massive HUSD sell-off that put pressure on the token’s price.

“Often the rebalancing of the anchor should happen naturally. However, if an abnormally large number of stablecoins are traded and the issuer freezes the redemption of stablecoins for fiat, rebalancing will be impossible.”

Huobi added that the reasons for Stable Universal’s freezing of the HUSD buyback are not entirely clear. However, it has been suggested that this may be due to the delisting of the stablecoin from the FTX exchange, which took place two weeks ago.

The divergence of HUSD from the pair to the dollar was the highest since the token was launched in 2018.

After discussions with Stable Universal, the liquidity issues were resolved on the morning of August 19th. HUSD has returned to the dollar stable, repaying all payments.

“Throughout the event, Huobi has provided users with the ability to freely convert HUSD to stablecoins such as USDT and USDC or other tokens available on the platform,” the exchange team added.

Huobi did not provide further details, stating that its impact on users was minimal.

Currency volumes and other transactions have remained stable in recent days.

“Given the recent volatility in the cryptocurrency market, Huobi advises its users to be vigilant and aware of potential risks,” the exchange said.

Recall that at the end of June, hackers attacked the Nirvana DeFi project, as a result of which the NIRV stablecoin lost parity against the dollar.

Read more about the unstable stablecoin rate in the bear market in the ForkLog article.

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