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.
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.
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.
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 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.
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.