Huobi beset by reports of law enforcement action

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Exchange Huobi has reassured customers that their assets stored in the platform’s wallets were safe, following online speculation that its COO Robin Zhu was either “under investigation” or had been taken into police custody in China. The company has denied to reporters that Zhu was detained.

The speculation came, according to news reports, after Huobi hosted a conference for digital currency industry entrepreneurs in Zunyi, some of whom returned to Beijing afterward.

A brief statement posted online on November 2 said the following, without giving details about the recent events in question:

“We have noticed that recent events have sparked inquiries and speculation from some users. Huobi reiterates: ‘We are currently operating normally, user assets are safe, and trading, deposits and withdrawals are operating as expected.'”

Huobi Global has headquarters in Singapore, though Zhu is a Chinese national. The exchange said Zhu was on a business trip, and would be back in time for a meeting this week.

Also this week, a Chinese language news site posted a report that police in Shanghai had taken eight people in custody on money laundering charges. The group had allegedly used a combination of AliPay accounts and Tether (USDT) on Huobi’s platform to transfer RMB 7.4 million (about US$1.1 million). The report did not claim Huobi staff or management were involved in this scheme.

CoinGeek has reached out to Huobi for comment.

Given the money and individual stakes involved, rumors about law enforcement actions surrounding Chinese digital asset businesses (or those operated by Chinese nationals overseas) can be difficult to substantiate or dispel. Often, however, unless the individuals involved are present and able to personally dispel them by posting something online themselves, there is some fire amid the smoke.

It also follows the detainment by police of Minxing “Star” Xu, founder of OKEx predecessor exchange OKCoin, which industry watchers noticed after OKEx froze deposits and withdrawals, saying a key signatory had become unavailable to make an important transaction. OKEx had also stated the incident had not affected any user funds.

“Under arrest” and “under investigation” can have many different meanings and outcomes. It is also unclear if any of the recent events have any connection to current businesses and business dealings, past dealings or individual issues.

The fact remains that transactions broadcast on a public blockchain like Bitcoin are permanent and visible forever. As Bitcoin creator Dr. Craig S. Wright has noted several times in the past, the authorities may work slowly but they can (and will) eventually catch up with all suspected wrongdoings, even if they happened a long time ago.

It is for this reason Bitcoin BSV encourages all industry participants to comply fully with financial regulations in their jurisdiction—and why it is important for Bitcoin users’ transactions to be connected to a verified identity.

This is a developing story. CoinGeek will update on the situation as we learn more.

See also: CoinGeek Live panel on The Future of Exchanges & Trading in a Tokenized World