Justin Sun‘s HTX redeems $500M in WBTC it wasn’t supposed to have

HTX, the crypto exchange advised by controversial figure Justin Sun, recently redeemed 5,182 wrapped bitcoin (WBTC) worth approximately $500 million, according to the official WBTC dashboard.

This comes just over three months after Sun entered into a new joint venture with BiT Global and BitGo to manage the custody of bitcoin for WBTC.

On-chain data for WBTC suggests this is the sixth-largest redemption of WBTC of all time and is the largest redemption in the last 635 days.

Threshold Network delegate ‘mrsthreshold.eth.limo’ highlighted that this large redemption was processed in only a few hours, whereas other recent smaller redemptions often seemed to take several days to process.

However, despite that delayed CoinList redemption, other entities have been able to redeem more quickly, including a redemption today by Tokka Labs, a Wintermute burn yesterday, and a couple of earlier burns this month. However, last month Wintermute did have to wait 12 days for a small mint.

Protos reached out to WBTC to determine why the CoinList redemption and Wintermute mint took longer to complete but had not received a response by press time.

This HTX address appears to have been receiving significant quantities of WBTC from Binance recently, including an additional 590 bitcoinafter this redemption.

Read more: WBTC supply contracts this month following Justin Sun custody drama

Taylor Monahan also highlighted that HTX appeared to have changed its deposit address shortly before these redemptions.

HTX and WBTC

This redemption of WBTC by HTX is strange because its not a commonly traded asset on the exchange, with 0 volume over the last 24 hours.

Furthermore, the HTX proof-of-reserves doesnt include any WBTC at all.

Furthermore, the 5,182 bitcoins would represent more than one-quarter of all user bitcoins on HTX.

Protos reached out to HTX to determine why it had so much WBTC that was not included in the proof-of-reserves, but at press, it hadnt responded.

Justin Suns bitcoin problems

This redemption highlights some of the bitcoin-related problems that Sun has recently been struggling with.

Read more: Coinbase to delist WBTC months after Justin Sun controversy

These include the fact that nearly half of all ‘bitcoin’ held at HTX is actually Bitcoin-on-Tron offered by Sun-owned Poloniex. This tokenized form of bitcoin doesnt disclose where it custodies the bitcoins, provides no proof-of-reserves, and is far larger than WBTC on Tron.

Additionally, Sun-linked pseudo-algorithmic stablecoin USDD recently removed 12,000 bitcoins from its reserveswithout any approval from the so-called decentralized autonomous organization (DAO) thats supposed to govern the stablecoin.

These various discrepancies highlight Suns willingness to freely move assets between entities he officially or unofficially controls.