Singapore-based Crypto Exchange, Huobi, to Open Office, Support Center in Russia

  • Digital asset exchange, Huobi, will open a new office in Russia.
  • Huobi's Russian language website will go live on November 12th, as it officially opens the office on the same date. 

Singapore-based digital asset exchange, Huobi, which is reportedly processing $1 billion in trades daily, has opened a new office Russia.

New Office, Website To Officially Open On November 12th

Huobi, which recently became a publicly listed company in Hong Kong, announced (during a St Petersburg conference) that it would officially open its Russia-based office on November 12th.

In order to make its services more accessible to the country’s residents, Huobi will be launching a Russian language website. Similar to Huobi’s other websites, the new site will have online support and a dedicated call center.

Presumably as an extension to its blockchain startup incubator program (Huobi Labs), Huobi will provide an online support center specifically for Russian firms looking to enter the crypto space.

Collaborating With Russia's "Top 10" Universities 

Notably, Huobi’s support center for Russian startups is being launched through a partnership with the Plekhanov Russian University of Economics (a “top 10” Moscow-based public research university) and the Moscow State Institute of International Relations (an academic institution run by Russia’s foreign ministry).

In September, Huobi had joined the Moscow-based VEB Innovation Fund - which is a venture capital-funded financial services platform that focuses on investing in “high technology projects.”

Founded in 2011, the VEB Fund aims to provide local startups the financial resources they need to develop their products.

Huobi Now Lists More Stablecoins

Established first in China, Huobi shifted its operations to other locations after the Chinese government began its crack down on cryptocurrency-related businesses. At present, Huobi has registered offices in Singapore, South Korea, London, San Francisco, Hong Kong, and Dubai.

Similar to how many crypto exchanges first started, Huobi only supported bitcoin (BTC) trading back in 2013. However, when crypto prices started to increase significantly last year, Huobi began listing more digital currencies on its trading platform.

After heightened fears regarding controversial stablecoin, Tether’s (USDT) operations, Huobi and many other exchanges have started listing other stablecoins. At present, Huobi lists the following USD-backed coins: Paxos Standard (PAX), True USD (TUSD), USD Coin (USDC), and Gemini Dollars (GUSD).

Huobi Accused Of "Mutual Voting"

In April 2018, Huobi Pro announced its plan to become a block producer (transaction validator) for the EOS platform. In October, a leaked document appeared to show that Huobi had been taking part in mutual and coordinated voting, when electing other block producers.

Although Huobi denied being involved in the incident, critics of the delegated proof-of-stake (DPoS) consensus mechanism (which EOS uses), such as Ethereum co-founder Vitalik Buterin, have said that “it was completely predictable [because] … human capacity for eternal vigilance is limited.”

Bitfinex and Tether Fraud Allegations: Analysis, Market Response, Community’s Reaction

On Thursday (April 25), New York Attorney General ("NYAG") Letitia James announced that she had obtained a court order against iFinex (the operator of crypto exchange Bitfinex) and Tether (the issuer of the stablecoin of the same name) to stop these two companies from any "further violations of New York law." This article summarizes the main highlights of the facts as presented by the NYAG, how the crypto markets have reacted, and early responses from some prominent members of the crypto community on Twitter. 

The “Facts” As Presented by Assistant Attorney General Whitehurst’s Affirmation

According to the affirmation filed (at the New York Supreme Court) on Thursday by Brian M. Whitehurst, who is an Assistant Attorney General ("AAG") in the office of NYAG James, here are the main "facts" of the case against Bitfinex and Tether, as beautifully summarized by highly-respected New York-based crypto trader/analyst Alex Krüger (@krugermacro on Twitter):

  • "Bitfinex has a $850M 'hole" since late 2018"
  • "The $850M are 'stuck' with Crypto Capital, a third party payments processor used by Bitfinex"
  • "Crypto Capital argues the $850M have been seized by govt authorities of various countries"
  • "Bitfinex mgmt believes Crypto Capital's principals may be engaged in fraud"
  • "USDT were seemingly fully backed by USD until Nov/2018"
  • "Between Nov/2018 and Mar/2019, Tether transferred $625M to Bitfinex => Tether ceased to be fully backed by USD"
  • "In Mar/2019 Bitfinex 'returned' the $625M to Bitfinex"
  • "Since Mar/2019 Bitfinex is covering the hole with a $900M line of credit from Tether"
  • "The line of credit (which pays 6.5% p.a.) is secured by iFinex shares"
  • "Bitfinex has accessed $700M from the line of credit"
  • "Per the NY AG, Bitfinex and Tether are engaged in fraud"

And here are some other interesting observations from Alex:

Bitfinex's Response 

A few hours after the NYAG's press release came out, Bitfinex issued its response in the form of an announcement posted to its website:

"Earlier today, the New York Attorney General’s office released an order it obtained – without notice or a hearing – in an attempt to compel Bitfinex and Tether to provide certain documents and seeking certain injunctive relief.

The New York Attorney General’s court filings were written in bad faith and are riddled with false assertions, including as to a purported $850 million “loss” at Crypto Capital. On the contrary, we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded. We are and have been actively working to exercise our rights and remedies and get those funds released. Sadly, the New York Attorney General’s office seems to be intent on undermining those efforts to the detriment of our customers.

Bitfinex and Tether have been fully cooperative with the New York Attorney General’s office, as both companies are with all regulators. The New York Attorney General’s office should focus its efforts on trying to aid and support our recovery efforts.

Both Bitfinex and Tether are financially strong – full stop. And both Bitfinex and Tether are committed to fighting this gross overreach by the New York Attorney General’s office against companies that are good corporate citizens and strong supporters of law enforcement. Bitfinex and Tether will vigorously challenge this, and any and all other actions, by the New York Attorney General’s office."

Crypto Markets' Response

Naturally, this news has hurt the price of pretty much all cryptoassets with the main exception being stablecoins that are Tether's main competition, such as USD Coin (USDC) and TrueUSD (TUSD), which have gone up between 1 and 2 percent against USD. 

BTC - 24 Hour CC Chart - 26 Apr 2019.png

ETH - 24 Hour CC Chart - 26 Apr 2019.png

USDT - 24 Hour CC Chart - 26 Apr 2019.png

USDC - 24 Hour CC Chart - 26 Apr 2019.png

What is most interesting about the crypto markets' reaction is that Tether's price has barely been affected this time, unlike in October, when the USDT price reached a low of $0.86. The fair value of Tether is $0.75 at a minimum since Tether seems to be backed 75% by "currency and cash equivalents" and 25% by a loan collateralized by iFinex shares, which used to be worth around $10, but worth around $2 a few hours ago:

This means that the collateral of 60,000,000 iFinex shares might only be worth around $120 million at the moment, whereas the line of credit is for $900 million.

This tweet sums up nicely what one can say about Tether's current fair value:

Crypto Community's Reaction

Here are some of the more interesting early reactions from the crypto community on Twitter:

 

Featured Image Credit: Photo via Pixabay.com