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A former manager at a major crypto exchange is accused of making illegal trades to bank $5 million in tether, report says

Tether dropped to well below $1 Thursday as crypto markets showed signs of stress.

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  • A former manager of the world’s fourth largest cryptocurrency exchange was accused of making illegal trades, the FT first reported.
  • Chen Boliang worked for Huobi and reportedly made $5 million in tether by betting against a company account.
  • Boliang reportedly set up a retail account in his father’s name and deposited $20 million in credit to make trades.

A former senior manager at Huobi, the world’s fourth largest cryptocurrency exchange by trading volume, was accused of making $5 million from illegal trades, according to a report from the Financial Times.

Chen Boliang is being prosecuted in Hong Kong for the alleged trades that were made between February and March of 2020. Boliang reportedly made a retail account in his father’s name and then deposited $20 million of credit into the account. Boliang is accused of making trades with that account, and ultimately pocketing $5 million in gains in the form of the Tether stablecoin.

A company spokesperson said Boliang’s employment was terminated in May 2020, and that the former employee worked in Huobi’s institutional clients department.

A civil lawsuit filed by Huobi reveals that Boliang provided the retail account with a $20 million credit line directly from the firm, essentially allowing the trades to be placed on margin with all the risk falling on Huobi.

Boliang was arrested shortly after his firing on the accusation that he used Huobi’s computers with criminal and dishonest intent, according to the report, which cited Hong Kong court records. Boliang ultimately faces seven counts in total.

This isn’t the first time a crypto exchange insider has been charged with illegal trading, as OpenSea’s former head of product Nathan Chastain became the first person to be charged with money laundering and wire fraud tied to NFT insider trading earlier this month.

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