Bitcoin Worth $350 Million Leaves Huobi After COO Arrested

Nivesh Rustgi

Nov. 3, 2020

The Huobi management team has also clarified that the exchange will continue operating despite the police investigation.

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Key Takeaways

Chinese media outlets reported the arrests of Huobi’s Chief Operating Officer (COO) Robin Zhu Jiawei.
Huobi officials, however, continue to deny these claims as Huobi continues normal operations.
Withdrawals increased drastically following the news, as customers withdrew more than $350 million in Bitcoin on Nov. 2.

News from China on the arrests of a senior Huobi official has struck fear among crypto users still reeling from the withdrawal suspensions at OKEx.

Regulatory Crackdown or Chinese FUD?

Though founded in China, Huobi moved to Singapore after the ban of cryptocurrency exchanges in China. Despite the move, the government prohibited senior officials of OKEx and Huobi from leaving the country back in 2017 to investigate both the exchanges.

Local reports now reveal that Huobi is back in the regulatory hot seat.

According to two independent reports from Chinese media sources Colin Wu and Deep Chain Financial, the Chinese police have taken Huobi COO Robin Zhu Jiawei under custody.

The news of the arrest comes just one month after the apprehension of OKEx owner, XuMingXing. While OKEx has denied all claims made related to the police investigation, withdrawals at the exchange have been suspended for 20 days.

The combined Bitcoin balance on Huobi and OKEx is over 460,000 BTC, worth $3.5 billion. A regulatory crackdown of the top two Chinese exchanges is bound to create fear, and today the market witnessed a small glimpse of it.

As soon as the report regarding arrests at Huobi leaked, customers began fleeing the exchange.

Analytics website Whale Alert reported $110 million outflows from Huobi to Bitfinex. Moreover, Crypto Quant reported net Bitcoin outflows of over $55 million in its Telegram group.

Huobi later said that the “rumors are false,” and all of its management officials have been accounted for.

New Reports Confirm Huobi Arrest

A new report from Colin Wu, however, appears to confirm the arrest news. Moreover, the account also insinuates that Zhu’s case is similar to the OKEx CEO’s.

After the arrest of Xu in mid-October, Huobi had taken quick steps to safeguard the exchange’s funds. One such step had been to pause withdrawals.

It is said that the Shanxi case involved in the previous OK founder Star Xu is the same thing of Huobi. However, Huobi has already conducted plans and drills after the Xu incident, so it may not stop withdrawing after being under pressure like OK.

— Wu Blockchain (@WuBlockchain) November 3, 2020

The net outflow of Bitcoin from the exchange on Nov. 2 was over 26,000 BTC worth more than $350 million.

Huobi Global net flows of Bitcoin. Source: Crypto Quant

Crypto markets have long been the victim of controversy in China, as the country plays host to a thriving crypto community and a lack of clear regulations.

While the exchange continues to deny the reports, repeated coincidences in these reports are hard to ignore.

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