The cryptocurrency space has been speculating lately regarding huge amounts of Tether (USDT) that had been deposited into popular crypto exchange Huobi, followed by withdrawals of significant amounts of BTC during the same time period.
While this is quite a common occurrence for crypto exchanges of this size, Huobi users are panicking because of a rumor that the exchange’s COO Zhu Jiawei might have been arrested as a part of China’s recent crackdown on crypto exchanges.
The rumors have triggered massive outflows of funds from Huobi Global over the past 24 hours according to Data from CryptoQuant, a crypto information provider. The development was supposedly the result of the company denying the rumors.
“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. All of Huobi’s management team members have been accounted for and have not been detained or arrested,” the exchange said in a statement.
The company noted that Zhu was on a flight back from a conference in Guizhou and would be attending a meeting in Beijing on November 3. The company assured its customers that their “assets are safe.”
“Huobi reiterates: ‘We are currently operating normally, user assets are safe, and trading, deposits, and withdrawals are operating as expected,'” Huobi said via an announcement on its website.
However, the statements from the exchange did not seem to have had any effect on the market as the platform’s native token Huobi Token (HT) took a hit and is down more than 13% over the past 24 hours.
The movement of large sums of money reported by crypto tracking platform Whale Alerts had sparked rumors that insiders familiar with the exchange’s inner workings were rearranging their funds.
Recent Crackdown fuel mass panic
The panic is quite justified in recent times, especially after a number of cryptocurrency exchanges were cracked down upon by authorities.
Last month, crypto exchange OKEx suspended all crypto withdrawals on the platform and soon announced that its founder Stax Xu had been under investigation for weeks. The statement was made one week after the investigation had begun.
Just weeks before, the CFTC cracked down on BitMEX and its founders including CEO Arthur Hayes, charging them for violating the Bank Secrecy Act (BSA) due to the exchange’s allegedly weak anti-money laundering and know-your-customer (KYC) policies.