China’s Biggest Bitcoin OTC Dealer Zhao Dong Reportedly Detained By Police

Reports from earlier this month have shown that these “illegal activities” usually meant dealing with cryptocurrencies. Many users reported their funds being blocked after they engaged in OTC trades involving digital assets, with many expecting that the practice of freezing accounts will only become more prevalent in the future. 8BTC reported earlier this week, some of China’s largest commercial banks have been actively freezing accounts of users they deemed were involved in “illegal activities.” 

And now, the latest reports from China have shown that some of the higher-up executives from one of its most popular trading firms have been taken into questioning. Reportedly, Zhao Dong, the head of over-the-counter (OTC) and crypto lending platform RenrenBit has been taken into a police station in the city of Hangzhou, located in the Zhejiang province. 

While the news about his “arrest” was first considered to be nothing but rumors, which were widely disputed by people close to Zhao, several conflicting reports began popping up that claimed the CEO was, indeed, detained. 

News sources reported that three “trustworthy” sources close to Zhao Dong confirmed that he was taken into questioning by Hangzhou police on Jun. 24. They said that this was most likely due to over-the-counter trading that his platform RenrenBit facilitates, as the Chinese government set out to get a tighter control over the burgeoning market. 

This, however, wasn’t the end of it. Information from an unnamed source suggested that Zhao wasn’t arrested, but that he went to the police on his own accord. 

RenrenBit released a statement to the media in which it said that Zhao returned from a trip to Tokyo in June and offered to cooperate with the investigation after learning about the incident. The company also clarified that his cooperation with the police had nothing to do with RenrenBit but his side-business. The company also emphasized that it’s continuing to operate normally with all staff working as usual. 

Zhao is one of the most influential and respected figures in China’s crypto space. Matthew Graham, CEO of Sino Global Capital said on Twitter that to compare it with west, it would be equivalent of the Winklevoss twins being arrested.

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://t.co/vlc9Akj2IV

— Matthew Graham (@mattysino) July 2, 2020

Zhao has been silent on his social media channels, with his followers reporting that he hasn’t issued a statement in days, a rumor that has led many to believe he was being held by the police. The RenrenBit CEO also owns a small percentage of cryptocurrency exchange Bitfinex. His percentage of ownership is much less than 5% according to CTO of Bitfinex. 

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