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Crypto lending platform CEO held by Chinese police for presumably illegal activities

crypto lending platform

Crypto lending platform and over-the-counter (OTC) Renrenbit head Zhao Dong, a well-known Bitfinex investor, has been taken into police custody for interrogation. China media reports.

According to media outlets BlockBeats and Chainnews, “hearsays” are going around in online communities about Zhao Dong with lots of people declaring that he has been talking into police custody in Hangzhou, in Zhejiang province. Nevertheless, there are other reports that are claiming he is actually being interrogated by police officers in Yancheng, Jiangsu province.

Bitfinex has been in a lot of trouble lately but there is a far possibility of Zhao Dong being dragged or implicated in similar cases.

Not about the crypto lending platform but about illegal operations?

Renrenbit’s head of marketing stated that nothing appears to be amiss and comments:

All of the [the company’s] staff have turned up for work as usual.

Rumour has it that the police are not looking into any possible wrongdoings on the part of Renrenbit. Rather, they are focusing on Zhao Dong’s private activities. Various social media users have laid claims that the case pertains to an “illegal crypto trading operation.”

As reported earlier, Zhao Dong is one of China’s renowned over-the-counter traders and the head of the crypto lending platform. In consonance to previous reports, his Blockchain investment organization DGroup was also raised among the shareholders of the Bitfinex exchange.

Clout and network helped Bitfinex win back Chinese traders

Zhao Dong is slightly accountable for putting together USD 1 billion Bitfinex LEO Token (LEO) initial exchange offering (IEO), with some claiming that the CEO’s ” clout and network helped Bitfinex win back Chinese traders.”

China-based Sino Global Capital chief Mathew Graham took to Twitter to identify that it “seems confirmed” that the Renrenbit CEO has for sure been taken in for interrogation.

Matthew Graham
@mattysino
Jul 2, 2020
Seems confirmed that 赵东 (RenrenBit CEO Zhao Dong) has in fact been detained by Hangzhou police. It’s extremely important to be clear that 1) detained is NOT the same as arrested 2) it does not necessarily follow that this is in relation to RenrenBit’s business operations.

Matthew Graham
@mattysino
To put this into perspective *if* 赵东” rumors were true, the Weatern analogy might be one of the Winklevoss twins being arrested. It’s a big deal. https://twitter.com/mattysino/status/1278576074012540928
Sally 嘎知
@sallywang666
A post published by Odaily on weibo saying Zhao Dong did not ” directly participate” in the illegal trading business. The question is “who did?”
12:51 PM · Jul 2, 2020china

Curious contradictions about crypto lending platforms in China

The People’s Bank of China (PBOC) banned financial institutions from handling Bitcoin transactions in 2013 and went further by banning ICOs and domestic cryptocurrency exchanges in 2017. Unsurprisingly, China does not consider cryptocurrencies to be legal tender and the country has a global reputation for harsh cryptocurrency regulations.

In January 2018, a leaked PBOC memo suggested that Bitcoin mining operations would soon be banned in China – the memo cited the miners’ consumption of energy resources and their tendency to stoke financial speculation.

In February 2018, a joint effort by PBOC and the Ministry of Industry and Information Technology revealed plans to expand crypto exchange regulations to foreign exchanges, banning access both to offshore platforms and to ICO websites.

Through the Institute of International Finance, the Chinese government has also expressed support for the implementation of a global regulatory framework for cryptocurrencies, including crypto lending platforms.

China has formally implemented a law governing cryptographic password management as part of its pre-release plans for its central bank digital currency (CBDC).

As English-language news media outlet China Money Network reported on Jan. 1, the latest regulations have become legally binding following their unveiling in October last year.

 

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