Hundreds of millions of dollars worth of cryptocurrencies were moved through Huobi in a few transactions and the exchange’s token plummeted Monday following reports that its COO had been arrested.

Why it matters: Huobi may the latest target for Chinese authorities cracking down on crypto exchanges, and it is feeling crypto investor jitters.

  • There has been no evidence proving that the COO had been arrested, and the company has denied the allegations. But markets reacted nonetheless.

Rumors: Huobi COO Zhu Jiawei was reportedly unreachable on Monday evening, and rumors of the his arrest began swirling around Chinese social media. Local media reported on the rumors a few hours later.

  • The exchange said that Zhu was on a flight returning from a conference in Guizhou and that he would be attending a meeting in Beijing on Tuesday morning.

Markets: At around midnight, Twitter accounts that monitor whale activity, or large cryptocurrency transactions, reported that about $400 million worth of the stablecoin Tether had moved to Huobi.

  • Whale transactions of Bitcoin meanwhile have moved the world’s most valuable cryptocurrency out of Huobi, some reports claimed.
  • The movement of large sums of money spurred speculation that insiders, privy to the exchange’s inner workings, are rearranging their funds.
  • Around the same time that the Tether whale transactions were reported, Huobi issued an official statement saying that it was operating normally.
  • Huobi’s token plummeted to $3.60 on Monday night, then regained about $0.20 during a short interval. It has been falling since. In the last 24 hours it had lost 13% of its value.
  • It is unclear whether the Huobi token’s activity is related to the rumors of the arrest or are a result of market volatility. Crypto markets have been falling in the last 24 hours; Bitcoin is down nearly 2% and Ethereum has fallen by 5.8%.

Context: On Oct. 16, Okex paused cryptocurrency withdrawals because one of its founders had been arrested.

READ MORE: Major disruption at Okex, Filecoin strike: Blockheads

Eliza Gkritsi

Eliza is TechNode's blockchain and fintech reporter. When she isn't obsessing over the rise of distributed ledger technology in China, she helps with editing.