While Huobi's relationship with Gibraltar is fairly new, they came under fire at the end of last year.
At least one key executive from crypto exchange Huobi is now in custody with Chinese police due to an investigation related to the exchange’s over-the-counter (OTC) trading service, multiple sources have told CoinDesk, giving more credence to rumors that have been circulating on Chinese social media.
{NOTE: Huobi has denied these claims in Nov.}
The two people were taken by the police in November and December 2020. Trading on the exchange is not affected because the police are investigating a case related to the Huobi’s separate OTC trading business, said these sources, which include former employees close to Huobi’s core team members and industry executives with direct knowledge about the matter.
It remains unclear whether the local police also put in custody the exchange’s co-founder, Lin Li, during the trip. Li might have been assisting the police with investigations, according to the sources. “Few people know Li’s whereabouts nowadays,” one source said.
Huobi Tech, the Hong Kong-based public company acquired by Li through a reverse takeover, has yet to file any disclosure related to the incident with the Hong Kong Exchange, indicating Li is not facing any criminal charges.
Huobi came on the police’s radar, in part, because of a particular investigation in 2018, which is also related to major exchange OKEx’s OTC trading services, one former employee said.
Despite Huobi’s fairly close relationship with the Chinese government, the exchange was not exempt from the investigation because the case is politically sensitive, the sources said.
As one of the largest crypto exchanges founded in China, Huobi has been working with the Chinese government to develop blockchain technology.
This news is ironic since in May 2020, a Huobi exec said, "Trust in blockchain: No corruption."
This story was also released by Nasdaq.
Huobi's close relationship with the CCP – Huobi Group Creates Chinese Communist Party Committee
Huobi's fairly new relationship with Gibraltar:
Leon Li, founder of Huobi Group, receives a Certificate of Appreciation from Albert Isola, minister for commerce of Her Majesty's Government of Gibraltar, on June 18, 2019, in Beijing.
Huobi Group Partners with the University of Gibraltar
University of Gibraltar and Huobi University sign Blockchain Education and Research MoU
Gibraltar signs MOU with Huobi Group on encryption techniques