Developing: Huobi Executive rumored to be held under custody

Rumors have surfaced in China that a Huobi Executive has been held under custody by Chinese Authorities.

Huge deposits into Huobi

There has been a deposit of over $400 Million worth of Tether and other cryptocurrencies to the exchange. Two of the transactions are extremely large, accounting for $304 million USD (as spotted by Whale alerts).

China is tightening control over cryptocurrencies trades

On an official level, cryptocurrency exchanges are not permitted in china after the 2017 ban. However, enforcement of this policy has been relatively weak in 2018 and 2019. Cryptocurrencies were traded largely via OTC – over the counter desks that exchanged fiat deposits to crypto. Interestingly enough, key Chinese exchanges such as Huobi, Okex, and Binance all offered OTC matching services. It is important to make the distinction that exchanges didn’t facilitate the actual exchange – instead, they matched exchange users and independently operated OTC services.

In 2020, OTCs bank accounts were targeted and bank accounts of involved parties were suspended.

Huobi Token drops in value

The value of the Huobi token declined by over 20% in a flash crash following the rumor. This was also correlated to the large movement of USDT out of the exchange.

Which Huobi executive is rumoured to be arrested?

Initially it was suggested that Chairman, Founder and CEO Leon Li was arrested. As with the OKEx detention incident, people on Chinese social media tried to find ways to see if this was true. Among those were people who again tried to check his pedometer and breathed a sign of relief when they found he had been walking more than 5,000 steps today.

Li Lin pedometer
Li Lin pedometer

Huobi Denies all rumors, stating they are false

Huobi has come out to deny all the rumors, stating that there are no members of the Huobi team that are taken under custody.

Users rush to withdraw their funds from Huobi

Nevertheless, users are not taking their chances and rushing to withdraw their deposits from Huobi. According to Whale Alert, nearly USD$240 million worth of Bitcoin has been transferred out of Huobi in the space of 2 hours on 3rd November 2020.

Some transfers out of Huobi
Some transfers out of Huobi
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Michael Gu
Michael Gu, Creator of Boxmining, stared in the Blockchain space as a Bitcoin miner in 2012. Something he immediately noticed was that accurate information is hard to come by in this space. He started Boxmining in 2017 mainly as a passion project, to educate people on digital assets and share his experiences. Being based in Asia, Michael also found a huge discrepancy between digital asset trends and knowledge gap in the West and China.