OK Huobi’s former CFO Li Shufei was inexplicably implicated and there was really a problem with the shell purchase funds?

On the evening of the 4th, a post on WeChat Moments by the former Huobi CTO attracted industry attention: "A professional manager from Hong Kong has screwed two of the world's top exchanges," referring to Li Shufei, the former CFO of OK and Huobi.

Li Shufei later responded, saying that he did not buy a shell for OK and that Huobi’s purchase of a shell was a compliant channel.

“Many enthusiastic people sent me a friend’s WeChat Moments in the industry, saying that the friend had insinuated that I had cheated two exchanges. I asked the friend, and he said that it was not sent by him, but was Photoshopped. Anyway, I believe him when he said it was Photoshopped.

I hope everyone can do their own job in the current atmosphere and not cause trouble for others. Some people are also speculating about buying shells, saying OK's shells and Huobi's shells. OK's shells were not executed by me. Huobi's shell transactions were all compliant channels and were carried out in accordance with the Hong Kong Stock Exchange regulations. There was no non-compliance.

I have been at Huobi for more than two years. I have done my best to help the group complete the compliance transfer, bought a Hong Kong listed company, which is the first company named after the digital currency/blockchain group, completed the acquisition of the Japanese exchange, completed the compliance asset management structure, and established a compliance team. Before I left, I arranged everything and the handover went smoothly before I left.

I hope the industry will stabilize and have new developments. We will work together to create a new world for the industry and create higher value for the blockchain and digital asset technology industries in China and the world. I wish China's blockchain and digital asset industries all the best and look forward to your rapid development! May God bless China! "

On September 20, 2018, Tongcheng Holdings reorganized its board of directors. Huobi CFO Li Shufei was appointed as the company's executive director, CFO and joint company secretary. Huobi officially took over Tongcheng Holdings. Li Lin acquired 73.73% of Tongcheng Holdings' shares for HK$604 million .

In January 2019, OK officially announced the completion of its equity acquisition of Qianjin Holdings Group (01499.HK), paying HK$483 million .

In mid-October, Xu Mingxing was investigated and reportedly placed under residential surveillance. According to Mars Finance, which is invested by OK, the real reason why Xu Mingxing was taken away on October 16 to assist in the investigation may be related to the backdoor listing of OK Group in Hong Kong last year. At that time, a sum of money for the shell purchase was borrowed from an underground bank in Shanxi , and the bank has now been investigated by the police.

Later, Wu said blockchain learned that Huobi COO Zhu Jiawei was also taken away by Shanxi police for investigation on November 2, but it has not yet been confirmed whether it was related to the shell purchase. As mentioned earlier, OK completed the shell purchase operation after Li Shufei left OK, and Li Shufei said he did not participate. Li Shufei also emphasized that Huobi's shell purchase was completely compliant, which seems to confirm the above content.

It is interesting to note that according to a report by Caijing.com in 2019, a person close to the shell company revealed that part of the funds used by Xu Mingxing to buy the shell company were paid in Bitcoin. OK later responded that the transaction was paid in cash and no Bitcoin was used. According to Zhaobei Research Institute, in early 2018, it was reported that Xu Mingxing went to the Hong Kong Stock Exchange to buy two shell companies, one called Tongcheng Holdings and the other called Qianjin Holdings. It is suspected that one of them was transferred to Li Lin. However, this statement has not been confirmed.

Industry insiders said that most of the exchange's revenue comes from handling fees, so they are all in cryptocurrencies. If hundreds of millions of yuan are needed to buy a shell, it is inevitable that the cryptocurrencies will be converted into foreign currencies and then into RMB through OTC dealers. In the context of strict investigations into telecommunications fraud, gambling and money laundering, it is probably very difficult to completely avoid accidental injuries.

Regarding Li Shufei, on May 14, 2018, Li Shufei announced his resignation as CEO of OKEx and CFO of OKCoin in his WeChat Moments. On May 21, he immediately joined Huobi as Secretary to the Board and Vice President of International Business Development, which attracted attacks from Xu Mingxing and threatened to take legal action. Later, Li Shufei's position changed to CFO. On August 10, 2020, Li Shufei resigned from Huobi, with the blessing of Li Lin. He is currently the president of Black Hole Investment. Li Shufei looks handsome and is known as the "Daniel Wu of the Coin Circle", but he seems to have a bad relationship with his colleagues. Huobi's former CSO Cai Kailong once attacked Li Shufei in a long article without naming him, saying that he was "invited for tea in Hong Kong."