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 was TechNode's blockchain and fintech reporter until July 2021, when she moved to CoinDesk to cover crypto in Asia. Get in touch with her via email or Twitter.