Huobi denies outage, admits compensation (with lawyer's interpretation)

On the 23rd, rights defenders from Huobi and OK went to Hainan and Beijing respectively to carry out on-site rights protection, which was suspected to be related to the statement published on the official account of the central bank the day before.

According to Liande, several people took part in rights protection in front of Huobi Building in Chengmai County, Haikou City, claiming that Huobi platform had "unplugged the network cable" and malicious liquidation. The rights protection was caused by the extreme market conditions in the digital currency market on March 12. Screenshots of the Huobi App page provided by several rights defenders showed that from 6 pm to 9 pm on March 12, under the slump of the encrypted digital currency market, the Huobi App displayed messages such as "system error" and "no network connection". In this case, users believed that they could not close the contract in time, resulting in liquidation, causing losses of varying degrees.

Huobi Global responded to Wu's inquiry that on March 12, the market plummeted and multiple platforms in the industry experienced trading system downtime amid abnormal fluctuations. However, during this period, Huobi Global's trading system remained stable and no technical failures occurred. A strict investigation was conducted afterwards. At that time, there were some delays in the transfer of assets in the system, but it did not affect the normal operation of the transaction, and it was not the main factor in the liquidation of the above-mentioned customers.

Regarding the on-site rights protection situation, Huobi Global Station stated that at around 9 am on March 23, 2020, about a dozen people gathered at the entrance of Huobi China's office park, collectively chanted slogans and took photos and videos, and left a few minutes later. It was later discovered that some people were unable to provide their Huobi accounts, and some did not trade on March 12. "Four of them are Huobi Global Station users and had transactions on March 12. We have arranged for someone to contact and follow up." The person in charge said.

In addition, OK rights defenders were also carrying out rights protection in Beijing. The rights defenders on site provided relevant pictures to Wu Shuo Blockchain.

OKEx issued a statement on the afternoon of the 23rd, admitting that there was a short period of lag on OKEx on March 12, and stated that the platform would provide appropriate compensation for the inability to trade due to the platform's own reasons.

On March 22, the central bank’s official WeChat public account issued a 315 warning, pointing out that some trading platforms had malicious downtime, forcing leveraged transactions to go bankrupt. The article said that a large virtual currency trading platform had system downtime 6 times in a year, 3 of which were sudden failures due to unknown reasons.

Huo Yijie, a former prosecutor and lawyer, told Wu Blockchain that general Internet companies involved in network operations must fulfill their security protection obligations in accordance with the Cybersecurity Law and other relevant laws and regulations to ensure that the network is not interfered with or damaged. In the event of a sudden safety incident, remedial measures should be taken immediately and reported to the regulatory authorities in a timely manner, otherwise there will be risks such as administrative penalties.

Huo Lawyer said that when a downtime occurs, it is necessary to distinguish the causes, internal or external, human or natural. Different causes lead to different consequences. If there is a relevant service agreement between the network operator and the user, and relevant downtime compensation matters are agreed upon, you can directly refer to the claim, but the general agreement will also have exemption clauses, which require comprehensive analysis.

Lawyer Huo said that there are two problems in the field of virtual currency. First, it is difficult for investors to know the cause of the downtime, and once a dispute is involved, the situation is relatively passive. Second, due to regulatory policies, once legal currency is involved, it is virtually more difficult to defend rights. Because there are many obstacles to defending rights through legal channels and the process is long, some anxious investors will choose to gather in groups to defend their rights and try to solve the problem as soon as possible.

Lawyer Huo suggested that the above methods can indeed put pressure on enterprises, but the risks of rights protection that may occur later should also be considered. Once there are radical behaviors or public disorder in the rights protection process, it is very easy to cause legal risks, which is not worth the loss.