The impressive stock surge of Chinese online service provider Xunlei came to a pause when a messy conflict between the company and its big data subsidiary broke out on November 28th. The NASDAQ-listed Xunlei has quintupled in value in just a few weeks following the release of its blockchain project OneCoin in October.

At midday of the 28th, Xunlei’s official Weibo account released a notice (in Chinese) stating that “Xunlei Finance”, along with a series of its sister products, are not run by Xunlei but rather its subsidiary Xunlei Big Data. In addition, Xunlei said it has revoked the authorized rights for its subsidiary to use the parent company’s branding and trandmark. A few hours later, the big data subsidiary came back dismissing the claim (in Chinese) that it had lost the right to trademark Xunlei. It also said the Weibo notice was a stunt put on by the brain behind OneCoin, Xunlei’s CEO Chen Lei, who was punishing the subsidiary for being uncooperative in helping OneCoin to grow.

“The online rumor is coming from Chen Lei,” says the big data subsidiary. “This is power abuse by Chen as the CEO of Xunlei to get revenge on Xunlei Big Data, who is unwilling to connive with Chen’s illegal OneCoin business. This is a unilateral decision by Chen, rather than procedural prudence conducted by Xunlei Group based on the company’s regulatory compliances,” says the subsidiary.

It is still unclear which side has the real claim. Xunlei’s stock price slipped more than 15% to around $21 following the aggressive exchange on the 28th, but was still significantly higher than its low point at $8.59 in 2014.

Like Bitcoin, OneCoin is a virtual currency generated through blockchain technology. China has recently banned all initial coin offering (ICO) activities, and Xunlei has denied that OneCoin constitutes ICO because it cannot be traded or purchased in cash.

Rita Liao

Telling the uncommon China stories through tech. I can be reached at ritacyliao [at] gmail [dot] com.

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