In a recent report, Xinhua News Agency stated that two leading Chinese bitcoin exchanges, Huobi and OKCoin, have allegedly invested nearly 1 billion yuan ($150 million) of idle client funds to buy wealth management products for their own gain, Quartz reported.
The People’s Bank of China earlier this year launched spot checks on domestic cryptocurrency exchanges to determine regulatory compliance by these platforms. Xinhua said that the recent investment into financial products by these companies was unearthed during the central bank’s investigation.
OKCoin has refuted these reports and issued an official statement, saying:
“Recently there have been rumors and false allegations regarding OKCoin, and its affiliates, in their use of idle client funds.
“We would like to assure all parties, and especially our customers, that we have a strict policy of placing idle client funds into bank-backed low risk products for safe-keeping.
“We consider the safety and integrity of our client funds as our most important responsibility.
“We refute any claims to the contrary as false.”
Huobi has not issued any official statement on the issue yet.
Earlier this year, BTCC, Huobi, and OKCoin decided to implement fee-based trading for bitcoin and litecoin, amid central bank’s efforts to rule out possible infringement including market manipulation, money laundering, and unauthorized financing by domestic cryptocurrency exchanges.
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