Huobi Partners With Major Russian Bank to Provide Legal Services to Crypto Organizations

  • Singapore-based digital asset exchange Huobi has partnered with Russian government-controlled development bank, Vnesheconombank (VEB).
  • The partnership involves cooperation regarding Russia-based crypto and blockchain-related initiatives.

Singapore-based digital asset exchange Huobi, which is one of the world’s largest crypto trading platforms by volume, has partnered with Russian government-controlled development bank Vnesheconombank (VEB) - in order to help Russia adopt blockchain technology.

As CryptoGlobe reported last month, Huobi had announced that it would be opening new offices in Russia and launching a company website in the Russian language. Officially launched on November 12, the new Huobi branch is open 24 hours a day and provides online customer support.

Setting Up "Mining Hotels", Training & Education Centers

Earlier this month, Huobi’s Russia-based digital currency exchange went live. As covered, Huobi’s new support center has been set up specifically to provide guidance to Russian firms planning to enter the crypto industry. In addition to offering a startup incubator and exchange service in Russia, Huobi’s partnership with Vnesheconombank will reportedly involve working cooperatively on blockchain education and training initiatives.

Huobi is also planning to establish crypto “mining hotels” and a Huobi Legal Lab, which will provide legal assistance to Russian firms looking to launch new crypto and blockchain-related businesses. Moreover, Huobi intends to work closely with VEB on its larger Center for Digital Transformations initiative, which involves helping Russian companies in other related industries of the digital economy.

Huobi’s Legal Lab will also aim to provide legal services in Russia’s courts to crypto-related organizations. Additionally, the lab’s experts will be drafting new legislation for Russia’s nascent blockchain industry in order to help local crypto market participants offer services that comply with the appropriate regulations.

Working Cooperatively With Local Academic Institutions

Notably, Huobi and Vnesheconombank will be receiving guidance and support from the Moscow State Institute of International Relations (MGIMO), one of the most prestigious academic institutions in Russia. Elina Sidorenko, the head of Russia’s working group of cryptocurrency risk assessment, has been appointed the head of Huobi’s Legal Lab.

Sidorenko, who is a faculty member at MGIMO, explained that the legal lab has been set up to ensure that the nation’s cryptoasset industry participants do not violate local legislation. Huobi’s legal experts will also make sure that Russian crypto firms comply with international laws. Commenting on the importance of developing proper regulatory guidelines, Sidorenko stated: 

In a situation when the regulatory framework is developing more slowly than the digital industry itself, legal support is vital for the business.

According to local reports, Russian crypto firms are finding it challenging to comply with the relevant laws as the nation’s existing legal framework does not clearly specify how to offer crypto-related services in a manner that does not violate local or international regulatory guidelines.

QuadrigaCX Has Sent Its Remaining Crypto to 'Big Four' Ernst & Young

The embattled Canadian cryptocurrency exchange QuadrigaCX has recently sent the remaining cryptocurrency it had in its hot wallets to ‘big four’ auditor Ernst & Young, which has been monitoring the proceedings in its creditor protection case.

According to an official report Ernst & Young released called the “Second Report of the Monitor,” QuadrigaCX sent nearly all its cryptocurrency to the auditor on February 14, after conducting a few test transactions to make sure it wouldn’t send them to the wrong address.

In total, the cryptocurrency exchange transferred 51 bitcoin, 952 ether, 822 litecoin, 33 bitcoin cash, and 2,033 bitcoin gold to the auditor. At press time, these cryptocurrencies are worth little over $410,000, an amount Ernst & Young is set to “hold the cryptocurrency in cold storage pending further order of the Court.”

The test transaction QuadrigaCX has made are notable, as earlier a costly blunder saw it inadvertently transfer 103 BTC ($468,000) to its cold wallets. The exchange has been unable to access its funds in cold storage since its founder and CEO Gerald Cotten unexpectedly passed away in India.

Ernst & Young’s report has also given the exchange’s creditors updates on its fiat holdings. It notes there are thee main sources: a payment processor called Costodian that holder about $25 million CAD in bank drafts, Stewart McKelvey which holds about $5.8 million CAD in bank drafts, and other amounts held by various third-party processors.

Costodian has reportedly already transferred about $20 million CAD to Ernst & Young, but is holding onto the remainder, and has claimed QuadrigaCX owns it $778,000 CAD in processing fees.

$145 Million Locked Away

The Canadian cryptocurrency exchange, as mentioned above, has been locked out of its cold storage wallets since its founder and CEO passed away, as he managed the operation through his laptop.

His wife Jennifer Robertson has since filed an affidavit where she revealed Cotten was single-handedly managing the exchange’s transactions, and that after he passed away no one was able to do so. Since then, the Supreme Court of Nova Scotia has granted QuadrigaCX creditor protection, and appointed Canadian law firms Miller Thomson and Cox & Palmer to represent its customers in the upcoming proceedings.

As CryptoGlobe covered, QuadrigaCX has already run out of funds, and a look into Cotten’s way of managing the exchange in the past has suggested users’ funds can be stored in paper wallets. The exchange’s downfall has cost at least one cryptocurrency enthusiast his $420,000 life savings.

Notably, blockchain researchers have released data that suggests QuadrigaCX didn’t have any funds stored in cold wallet, and even found suspicious transactions to other exchanges, including Poloniex, Bitfinex, and ShapeShift.