A former manager with one of the world’s largest digital currency exchanges, Huobi, is being accused of illicit trading that allegedly made him $5 million in profits.
A report by the Financial Times revealed that Chen Boliang is being charged with fraud for trades he made in February and March 2020 when he was a senior manager at the exchange’s institutional clients department.
The 34-year-old is alleged to have set up a Huobi retail account in his father’s name and gave it a $20 million credit line from the exchange, using his senior status to approve the process. He then went on to trade against a Huobi corporate account which he also controlled, walking away with $5 million in profits from the venture.
Chen was arrested two months later, in May 2020, although this is the first time the case has been reported. He was charged with six counts of accessing Huobi’s computer systems with criminal intent and one count of handling the proceeds of crime in the $5 million worth of USDT he made. His case is set for a preliminary inquiry before a magistrate next week, in which it will be decided if there is enough evidence for the case to go to trial.
As of now, Chen is currently out on a $25,000 bail.
“Mr Boliang Chen’s employment with Huobi Global was terminated in May 2020. We have no further comments pertaining to the charges against Mr Boliang Chen and believe in the administration of justice by the HK Special Administrative Region,” Huobi stated in a statement to FT.
The exchange has remained tightlipped on how it discovered Chen’s alleged crimes, although public records show that it reported Chen to the Hong Kong authorities in April 2020.
The digital asset industry is no stranger to this crime. Earlier this month, the U.S. Department of Justice charged a former employee at the NFT marketplace OpenSea with wire fraud and money laundering for insider trading-related crimes. The SEC has also reportedly launched a probe into insider trading at a major American exchange.
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