Crypto traders along with other members of the community lashed out with criticisms of the new decision Huobi exchange has made recently. The harsh reaction led to the voting day to be postponed. Last week the platform has updated the rules of voting for the addition of new tokens. It resulted in two groups of investors in charge for the decisions on which new tokens will be listed.
Why it is important
- According to the new rules, all tokens submitted for public voting must be supported by permanent investors, otherwise, they will be removed from the list, and the coins given as votes will be returned to the users.
- Previously, investors did not have such privileges, while users’ votes were equivalent.
The first so-called "Standing Node" group included 14 large traditional venture capital firms, such as Bitmain, ZhenFund, FBG, Unity Ventures and Draper Dragon. It was also decided that the group of "Selected nodes" would consist of 31 cryptocurrency companies, which will include Node Capital, Dfund, BlockVC, GENESIS and other market players. At the same time, its composition will be determined by open voting.
Earlier rules that were set right after the launch of the Huobi Autonomous Digital Asset Exchange (HADAX) in February, allowed all users to vote alongside with the "nodes" for a particular token to be listed using the HT token. Later, a mechanism appeared that allowed well-known venture companies to have the privileges of "Supernode" and participate in the consideration of new tokens before the public vote.
Following the rules’ update, in order for the new tokens not to be removed from the listing, they must be supported by permanent investors. Thus, now the nodes will play a more significant role in deciding whether to list one or another token on the HADAX platform. This step immediately triggered a response from investors who felt that their rights were limited, and the new rules were considered discriminatory and authoritarian.
The new regulations did not impress Du Jun, the founder of Node Capital and co-founder of the Huobi Exchange either. In his public message on WeChat, he stated that although his firm received a status of a "supernode", it would not participate in the voting.
Following the public announcement made by Node Capital, other crypto funds started to join the boycott stating that they would not tolerate the new rules and would refuse their “supernode” roles.
In response to that move, Li Lin, the co-founder and CEO of Huobi Group, wrote on WeChat that this step is aimed at ensuring the quality of the tokens chosen for listing on the platform.
“I apologize for not having effectively communicated with supernodes before publishing our new decision. [...] We understand that some selected nodes feel disrespected or their branding is hurt, which led to their respective responses. We build collaborations based on a win-win purpose. Partnership or not is always a free market choice. Huobi always opens its gate for partners. But HADAX must be completely revamped and we will have another major upgrade in July. In regardless of what model it will take, we think being responsible for users is of utmost importance.” Li Lin said.
It is worth noting, that today Huobi Pro crypto exchange is suspending its service for traders and investors from Japan. A major trading platform was not licensed by the Financial Services Agency (FSA) of the country. 13% of the Huobi's customers live in Japan. According to a letter distributed to users, they will not be able to use the website after July 2.
By Nadya Astam