Data from Nansen shows that crypto exchange Huobi saw over $44 million worth of outflows over the last week, bringing Total Value Locked (TVL) at the exchange down to $2.5 billion at the time of writing.

The larger-than-normal outflows followed reports that senior executives at the exchange had been arrested by Chinese police, amid an investigation into whether the firm provided payments and settlements through cryptocurrency for gambling programs.

Soon enough, rumors began circulating that Huobi stakeholder and Tron founder Justin Sun had also been arrested. However, according to Adam Cochran, an industry watcher who claims to have inside information from sources at Tron, Sun himself has not been detained, but rather, employees from the exchange are being interrogated on matters related to “Huobi and Sun’s money laundering.”

Cochran also claims that Huobi is likely insolvent, evidenced by a rapid selloff of USDT on Friday after the news of the alleged police investigation was made public, and weeks of steady decline in USDT reserves at the exchange. His analysis points to Huobi holding just $90 million worth of USDC and USDT, despite Huobi’s “Merkle Tree Audit” claiming a wallet balance of $631 million USDT.

Meanwhile, executives from Huobi refuted these claims, labeling the rumors as FUD with no basis. 

“This malicious rumor has been confirmed untrue, and Huobi is currently doing well. Huobi global will continue to provide trustworthy service to crypto users,” wrote Huobi’s head of social media on Twitter.

Another Huobi community manager also denied that any executives from the exchange had been questioned by law enforcement.