Almost $300 million in bitcoin, around 18,652 in total, was transferred to Binance from Huobi between November 2 and 11 according to data provided by CryptoQuant.
The flow of bitcoin from Huobi to Binance has reached a record high ever since Robin Zhu, chief operating officer at Huobi, went missing on November 2.
Deep Chain Financial and Colin Wu, two reputable Chinese media sources, both reported at the time that Zhu had been arrested by Chinese police but these reports are still unconfirmed.
There has been a crackdown by financial regulators in China of late following revived speculation in the sector since President Xi Jinping’s positive recognition of blockchain technology earlier this year.
An official directive signed by the Shanghai Internet Finance Rectification Agency and the Shanghai Bureau of the People’s Bank of China has given financial regulators until November 22 to inspect all crypto exchange services in each district of Shanghai and report to the central bank for further instructions.
Financial Authorities Cracking Down
The investigations and crackdowns are nothing new; Chinese regulators have long been tightening the vice on crypto trading platforms, especially those utilized most by Chinese clients. A lot of these exchanges have been rumored to have close links to the Chinese government.
Huobi isn’t the only exchange under pressure: TokenBetter suspended all withdrawals around a month ago and is being investigated by Sichuan province authorities.
Police in China’s Sichuan province are investigating TokenBetter after suspending its withdrawals roughly one month ago.
Colin Wu tweeted earlier this week; “Wu learned that after OK and Huobi, another exchange from China, TokenBetter, was investigated by the police in Sichuan, China. Earlier, it claimed to have received an investment of 50 million US dollars, but the probability is exaggerated.”
He went on to add that the “person-in-charge” of the exchange is currently being investigated.
OKEx Customers Still Unable to Make Withdrawals
Rival exchange OKEx currently has $1.26 billion of outstanding contracts, making it the world’s largest crypto derivatives exchange, but its customers have been unable to make withdrawals following an unusual exchange failure back in mid-October.
According to OKEx, “one of our private key holders is currently cooperating with a public security bureau in investigations were required,” and the company has released no further information since then of any relevance.
It is widely believed that that the exchange has not fallen prey to a scam or hack, but rather a show of strength by the Chinese Communist Party to remind the country’s billionaire entrepreneurs exactly who is in charge.
Key personnel vanish, there is little to no communication, and cold wallets are drained in scam-like scenarios. The ordinary whirlwind of reassuring correspondence with clients regarding insurance and compensation in the wake of a hack is entirely absent.
These crackdowns spell bad news not only for China but for all countries overseas that would generally do business with them. The imbroglio surrounding Huobi and OKEx appears to be the presage to a much larger Chinese crackdown on finance-related payments and blockchain.