Huobi COO Arrested - Huobi Token Plummets Amidst Bizarre Happenings

The times are getting tough for centralized exchanges, after the recent problems at OKEx and KuCoin, this time it’s Huobi Global which has bizarre events happening at the exchange. According to sources, Huobi Chief Operating Officer (COO) Mr Zhu Jiawei has been under police investigation for quite some time now, while the Huobi founder Li Lin appears to be missing from the public stage.

Breaking: Wu confirmed from multiple sources that Huobi COO Zhu Jiawei is under police investigation. He is the number two player in Huobi. Huobi is the exchange with the most Chinese users and the largest Bitcoin stock in the world. Li Lin, the founder of Huobi, is unknown. pic.twitter.com/MbOwLWxx6o
— Colin Wu（WuBlockchain） (@WuBlockchain) November 3, 2020

This is latest in a series of regulatory pressure and crackdowns on China based exchanges. Its significant because centralized exchanges usually have multi-Sig cold wallets to process withdrawals. So, if an executive is under investigation or in jail, they can’t authorize it and users can’t get their money out. Huobi users are reporting issues with withdrawals currently.

I asked from your support why my withdrawals are freezed: they said they don´t know. very professional…not. people, beware this scam site.
— Snowman (@snowman_crypto) November 2, 2020

Huobi Token (HT) Is Down -18.5% In The Past Week

Unsurprisingly, the exchange’s native Huobi Token (HT) price has plummeted severely in the last 7 days. It is currently down -18.5% in the past week and -4% in the last 24 hours. As the exchange’s future becomes uncertain and risks of funds getting stuck rise, the investor’s confidence in the HT token has taken a hit.

Huobi Token (HT) - CoinGecko — Huobi Token (HT) – CoinGecko

Whale Alert Shows Massive Outflows From Huobi Global

But that’s not the only problematic part, the high value transactions monitoring tool Whale Alert is showing that over $500M have been transferred out of Huobi in the last 24 hours. The timing is impeccable and hints at the team / big players moving funds out of exchange, in anticipation of law enforcement action, which can render the funds frozen.

https://twitter.com/CryptoWhale/status/1323507223230849024

The team hasn’t commented on the matter, raising further suspicions and fears of insolvency, where’s user funds can become unavailable for a long period of time. Unfortunately, the recent tweets from the official Huobi Twitter handle insisting that everything is normal and the rumors aren’t true isn’t helping things up.

Huobi $500M Outflow Transactions - Whale Alert — Huobi $500M Outflow Transactions – Whale Alert

Huobi exchange has the most Chinese users and the Chinese Govt isn’t very content with crypto-infrastruture outside it’s control, especially at a time when the race for Central Bank Digital Currency (CBDC) is heating up and the People’s Bank Of China is reported to be in advanced stages of rolling out Digital Yuan.

Huobi Global Is Operating Normally

We have become aware of rumors within our community about the arrest of a Huobi senior executive by local officials. We can share with confidence that these rumors are false.
— Huobi (@HuobiGlobal) November 2, 2020

But crypto-markets don’t appear to be affected much by the news, unlike in the past. This can be attributed to the maturity of the crypto markets. Recently, decentralized infrastructure has also advanced and gained greater usage, curbing user’s reliance on traditional exchanges. In these times, it is rightly advisable to move funds out of centralized exchanges and hold own keys.