The sequelae of the virtual currency platform's withdrawal: Huoxin will clear HCT, and users will need to withdraw or switch to unknown new points with a JD card
Early community participants spent hundreds of thousands of years in exchange for shopping cards.
Arrangements for several virtual currency exchanges to remove users from mainland China have entered the countdown, and related platforms have also been affected. Recently, a user of Huoxin, a social networking platform in the cryptocurrency industry, told Blue Whale Finance that platform points will be emptied. Other than being able to exchange them for unknown new points, the other way to withdraw is to participate in a lottery or exchange for a JD card.
According to the Huoxin app, the points store can be exchanged for JD cards with face values ranging from 50 yuan to several thousand yuan. Based on 33333 HCT points that can be exchanged for a JD card worth 1,000 yuan, the value of a single HCT point is 0.03 yuan. According to reports, there is no shortage of users who have invested hundreds of thousands in a few years. Some users also discovered that recently, the number of daily exchanges is limited, sometimes only once, or has been emptied. As of the evening of December 7, the JD card with a face value of 3,000 yuan had been emptied on the same day.
It is difficult for large players to withdraw the full amount through redemption. The status of the new points that can be redeemed has not been officially disclosed, and the information is unequal. Faced with the unknowns brought about by lack of communication, some users were quite uncomfortable with the platform's handling.
HCT is Huoxin Credit, a social networking platform owned by Huobi. The Huoxin App has launched the HCT peer-to-peer trading function
Huoxin was founded on the cryptocurrency exchange Huobi. It started a public beta in 2018 and went live. The English name is Huobi Chat, and it has become an instant messaging product of the Huobi system. According to Huobi Group's official website, Huoxin is a chat software specially created for the blockchain industry.
Users can earn HCT native points known as “locomotives” through chat, posting article updates, and being liked. They can get 20 points by posting the first post every day. There is an upper limit on the number of points per day, and it is also known as a social networking or mining product.
“Grandpa Qi”, then CEO of Huobi Global, said in an interview in a social media group that Huoxin was a social platform that Li Lin insisted on excluding his opponents. According to people close to Huoxin, the person in charge of Huoxin was initially “Lao Wang”. Due to serious system bugs, it was changed to “Egg Master” Yellow River, and later succeeded by “Grandpa Seven” Weng Xiaoqi. The latter has not appeared publicly for almost a year, and the person in charge has changed again. In 2020, reports mentioned that Huoxin had 3 million registered users.
At the beginning of its establishment, Li Lin, the founder of Huobi, was active in Huoxin's official group and other groups, and also stated that “it is important to have HTC, which is equivalent to us making a Huoxin with users”, and that it is intended to be a social media for users in the coin industry; it also called for HCT not to rush to the exchange; it was driven by demand rather than hype, and encouraged users to communicate on the platform, not just buy coins (HCT).
Although the founding team emphasized the need to strengthen the social platform ecosystem, they did not focus on mining HCT and trading transactions, and called HCT points rather than tokens. According to the user, the Huoxin app previously had a “flash exchange square” in-market transaction function for users to trade HCT, and the US dollar stablecoin USDT can be directly exchanged for HCT. At the same time, users can also trade privately on Huoxin, and the chat interface can send crypto asset red envelopes, including USDT, HCT red envelopes, etc.
On the Huoxin app, “Redemption Plaza” is offline, and HCT's current quotes and other information are not displayed.
As a platform credit, HCT's transaction function and value are also one of the factors that attract users to join. According to the picture information, there are also users who have been awarded the “HCT Large Holders” trophy based on their annual holdings. According to reports, Huoxin previously charged a certain handling fee from peer-to-peer coin transactions. The “Cash Exchange Plaza” trading platform fee brings revenue to the platform.
Despite claiming to be points, the platform now also uses shopping cards to indirectly induce withdrawal of HCT assets. Many HCT holders believe that the platform should not dispose of user assets in a tough manner, and that the disposal method caused HCT prices to instantly jump sharply, causing damage to HCT investors.
According to information, the HCT unit price has remained around 0.07 yuan for a long time, exceeding 0.1 yuan during the cryptocurrency bull market in 2021. Before the plan was released, the HCT unit price was around 0.04 yuan to 0.05 yuan. Currently, most of the bids of users who claim to receive HCT are less than 0.03 yuan. In the past three years, in the face of the exponential growth rate of the cryptocurrency market, HCT holders have mixed feelings.
Early community participants suffered heavy losses and repeated attempts to communicate with Huobi were unresponsive
Blue Whale Finance learned that it was not only ordinary users, but also “Little Fire” groups, that is, long-term volunteers who participated in Huoxin's early community development, daily community maintenance, and app testing.
Chen Li (pseudonym), a participant who has been volunteering for more than three years, introduced Blue Whale Finance. He himself has a relevant professional background. He has submitted numerous documents for Huoxin product development proposals, as well as documents for event planning, operation and implementation. According to its report, on March 8, 2019, a loophole was revealed in Huoxin's back-office system. Users can obtain unlimited HCT. The “Little Fire” group invested funds after the official lockdown to stabilize the HCT price, returning from 0.01 points to around 0.07 yuan.
On March 8, 2019, the HCT price dropped nearly tenfold. At the time, if you enter HCT in negative units on the redemption page, the other party will receive the corresponding positive HCT value. Some users exploited this vulnerability to obtain a large number of HCT at zero cost. At the time, “Huobi employees” also revealed Huoxin's internal management issues on workplace social networking platforms. Following the vulnerability incident, Huoxin launched version 2.0 and held a related press conference. Li Lin and Weng Xiaoqi delivered online speeches.
As for the “Little Fire” group's contribution to ecology, Li Lin's account of the same name once lamented how difficult it was on social platforms, and Huoxin also presented the “Excellent Little Fire” trophy to the group. According to information, this group needs to pass a half-year inspection period before they can be selected, and there is a special WeChat work group.
Chen Li recalled that he first saw Huoxin advertisements on the Huobi app and downloaded and used it, and believed that social networking was valuable to the industry, and Huobi was backed by Huobi. Huobi executives including Li Lin and others were also active in chat rooms. Other insiders such as Sun Yuchen and “Grandpa Bao” also spoke out on Huoxin, and that cryptocurrency industry projects continued to be active in Huoxin during the Spring Festival. For the above reasons, it has been involved in Huoxin Construction for nearly three years.
Huoxin launched a campaign to split 100 million HCT at the time, and the level of publicity was unprecedented. At the same time, it was also questioned in the early stages due to issues such as delays in launch and bugs.
In addition to participating in community and product construction, there is no shortage of volunteers like Chen Li who have invested heavily in purchasing HCT. According to reports, after exchanging their Huobi platform coin HT for USDT, they purchased HCT one after another, investing hundreds of thousands, and still holding millions of HCTs, at a cost of around 0.08 yuan. There are also users with higher investment costs, and the HCT unit price dropped rapidly after rising to 0.3 yuan. Based on the current exchange mechanism, early community participants mostly lost 50% or more, and there were problems such as limits on shopping card exchanges.
Faced with the current situation, participants such as Chen Li had no response in communicating with Huobi executives and employees, and were quite passive. The hard work and assets invested were not taken seriously by the platform, and they felt that they were deeply disrespected. Chen Li acknowledged that investing is risky, and his current appeal is the right to know about new points and healthy communication.
According to the platform regulations, HCT holders will be redeemed for new points on January 1, 2022 if they do not withdraw through point redemption. The details of the new points have not been disclosed by Huoxin, and there is no way for the volunteer group to know.
Companies in mainland China that have withdrawn users from the exchange are cancelled, and companies associated with labor contracts renewed through a third party company are owned by natural persons
On September 26, Huobi Global (Huobi Global) announced that registration of new users in mainland China was suspended on September 24. Existing users who have been authenticated as identities in mainland China are scheduled to be withdrawn on or before December 31, 2021.
On October 6, Li Lin confessed in the HT Group that after a few months in Shanxi, he thought he should focus on his family and communicate with users about his journey to exit the Chinese market. In November 2020, after Huobi hosted an event in Zunyi, the former COO Zhu Jiawei was allegedly taken away for investigation by the Shanxi police. Li Lin disappeared from public view for several months thereafter and only returned to work in March 2021. During this period, Du Jungang, the former co-founder of Huobi, returned and spoke out to the outside world.
Half a year ago, the Financial Stability and Development Commission of the State Council spoke out against Bitcoin mining and trading. The next day, it was already reported that Huobi would no longer open derivatives trading to new mainland users and suspended mining machine services in mainland China. According to people close to Huobi, the company has proposed several times to reduce leverage in derivatives trading on the platform.
At the beginning of June, Huobi proposed a distributed office plan to employees. Since then, Huobi requested employees to work in Singapore. Some employees chose to stay and work from home in the country, and some coordination of visa applications was blocked. Later, some employees returned to work. In the same period, Huobi gradually withdrew and adjusted companies registered in mainland China, and all enterprises where Li Lin acted as a legal entity were cancelled. In November, Li Lin and Du Youren formed a joint venture to establish Beijing Zhiyu Animal Husbandry Enterprise Management and Development Co., Ltd., with legal entities as other natural persons. According to information from various sources, employees now need to sign labor contracts with third party outsourcing companies.
The developer of Huoxin App is Hainan Haotai Network Technology Co., Ltd. (hereinafter referred to as “Xinyi Network”). The company was founded in June 2018. The initial shareholders were Blue Chain Technology Co., Ltd. and Beijing Innovation Risheng Network Technology Co., Ltd. (hereinafter referred to as “Innovation Risheng”). In 2019, it was changed to natural person Gao, who worked as a supervisor at Hainan Xinyi Network Technology Co., Ltd. (hereinafter referred to as “Xinyi Network”). Xinyi Network is wholly owned by Huobi's former COO Zhu Jiawei, while Innovation Risheng is held by Huobi founder Li Lin, and both have been cancelled. Currently, good parties still exist, and shareholders have all changed to natural persons.
After Huobi announced its withdrawal, exchanges such as Binance announced the withdrawal of mainland Chinese users. OKEx stated that it would maintain its policy of withdrawing from the mainland China market; in addition to the “three major exchanges,” Matcha MEXC, KuCoin, Bitget, Coinex, and BitMart indicated that users in mainland China would be removed during the year; Sesame Gate.io, Anyin AEX, and Manbi.com CoinBene indicated that they would close registration and service services for mainland users.
The central bank issued a statement that overseas virtual currency exchanges providing services to domestic residents are also illegal financial activities. Among the above platforms, KuCoin's domestic affiliate KuCoin (Chengdu) Technology Co., Ltd., the matcha related entity Meow Star City Technology Co., Ltd., and the Gate-related company Jinan Manwei Information Technology Co., Ltd., have all previously been cancelled. In 2021, KuCoin affiliated companies such as Chengdu Lemon Cloud Network Technology Co., Ltd. were cancelled one after another. The cancellation of Atomic Chain (Beijing) Technology Co., Ltd., a subsidiary of Mancoin Network CEO Zhang Yangbin, sparked public panic. The simple cancellation was later cancelled. Currently, it is listed as operating abnormally.
