On Friday Nov 14th, 2014, BitVC, a subsidiary of the Chinese exchange Huobi, announced its futures trading platform has lost more than 3200 BTC (about $1,271,000 USD) this past week, and forced the users who won money that week to spread the loss, taking away 46.1% of all users profits that week. As expected, this caused an immediate and violent outage in the Chinese bitcoin community. Users have threatened to sue, get police involved, or settle the matter “privately”.
Huobi has not been transparent about exactly what happened; the amount of bitcoin being quoted as lost has changed from 3700(pictured below) to 3200.
Adding further embarrassment to the situation, BitVC, has an on-going marketing promotion where the top winners and their earnings from that week are listed on site. From the roster, it is easy to see that 46% of the top winners profits alone would more than cover the quoted figure of bitcoin lost. If they did indeed take 46% of the profits from all users the total would far exceed the amount lost implying Huobi directly pocketed users’ profits.
Here's the photo that shows the settlement details and leaderboard displaying earnings(Chinese)
As of late, Huobi/BitVC has suffered a series of other problems as well, including misplacing users funds:
About 1.5 months ago, on Sept 25, Huobi officially admitted a loss of 920 BTC and 8100 LTC, roughly $400,000 USD on their trading platform. Huobi attributed this to operator error for mistakenly sending BTC and LTC to wrong user accounts. Source: http://ift.tt/1H1fitM
Afterwards other users claimed that Huobi had also mistakenly deposited 5.5 million CNY into their account. http://ift.tt/1xBZWXj
A couple months before that, between May 25 and June 2, Huobi’s trading platform suffered no less than 5 serious mishaps which traded users orders at 1 RMB, as well as 10,000 RMB, while the market prices on all other exchanges are around 3800 RMB. Source: http://ift.tt/1xBZYP9
Total losses suffered by the Huobi/BitVC is estimated to exceed $1.7 million USD, putting them in the top 5 bitcoin losses in history so far, according to the List of Bitcoin Heists on http://ift.tt/1n1eY3F
Submitted November 15, 2014 at 04:25PM by futurescalc http://ift.tt/1xBZZ5p