Singapore-based cryptocurrency exchange, Huobi Global, has come under fire for manipulating the price of project tokens that have already moved to mainnet, by refusing to initiate a swap for exchange users.
The whistleblower, in this case, is an anonymous Reddit user (Individual Pirate) who has been met with little support from the Huobi team after several requests to complete a token swap. Instead, Huobi allegedly influenced the price of these former Ethereum-based tokens by practicing limited supply trading.
The allegation is that Huobi, for at least six months, does not allow deposits and withdrawals on these tokens but provides trading. Then, with trading open and the exchange allegedly holding a significant portion of the traded token supply, they can move prices to make profits since the token trades at a premium on their platform.
As shown in the chart below, while the price of Fusion Protocol (FSN) has traded for a relatively stable price on OKEx, the price on Huobi is in stark contrast and at a premium.
Fusion Protocol (FSN) Price Story
While Huobi is allegedly using this tactic to make profits off a handful of tokens such as ADX, AAC, BCD, DGB, AKRO, BCX and BIFI, a case with Fusion Protocol (FSN) seemingly stands out as substantial proof that the action by the exchange is deliberate.
On June 19, 2019, the Fusion Foundation announced that it was launching a mainnet urging users to swap ERC-20 FSN tokens to native Fusion main network tokens via a simple transfer to an FSN address.
However, while Huobi allegedly claims to have “not received the relevant news of FSN upgrading the main network,” the exchange itself had paused deposit and withdrawals of FSN in late September 2019.
Huobi then cited technical issues with the Fusion wallet and labeled the pause a “temporary suspension.” As per the allegations, the exchange has also used this tactic for a range of tokens that have since moved to the mainnet.
Further allegations include that either Huobi is liaising with the Fusion Foundation (and other projects) to move prices in their favor or merely doing it in their favor. Hotbit, MXC, OKex, Bittrex, Upbit, Bibox and Citex have since added support for mainnet FSN.
Meanwhile, Coinfomania has reached out to Huobi for comments but is yet to get an official response at press time. We will update this content accordingly.