A former senior executive at Huobi, one of the world’s largest crypto exchanges, is being sued in Hong Kong after he was accused of making $5 million by secretly trading against a corporate account he controlled.

The case, which has not previously been reported, relates to transactions allegedly carried out in February and March 2020 by Chen Boliang, then a senior official in Huobi’s institutional client department.

The claims against Chen come as the cryptocurrency industry not only suffers a spiraling credit crisis, but, after years in the Wild West of finance, increasingly faces the consequences of corporate conduct. employees and compliance issues that have ensnared more traditional banks and fund managers.

Since its launch in China in 2013, Huobi has become one of the top five crypto exchanges in the world by daily volume of crypto traded. The exchange is now registered in Seychelles following a crackdown on crypto exchanges in China last year.

Chen’s case is due for a preliminary investigation before a magistrate next week. Such inquiries in Hong Kong law are requested by a defendant and are conducted to decide whether there is enough evidence for the case to proceed to trial.

Chen, 34, was arrested in May 2020 and charged with accessing Huobi’s computer systems with criminal or dishonest intent and handling the proceeds of crime in the form of $5 million in cash. ‘USDT, a type of stablecoin, according to Hong Kong. court records.

He allegedly set up a Huobi retail account in his father’s name and granted him a $20 million line of credit with the stock exchange, according to a civil lawsuit filed by Huobi. He then traded for a Huobi business account he also controlled, a scheme that earned him about $5 million in profit, according to the lawsuit.

Chen is free on $25,000 bail, according to an indictment issued in Hong Kong this month. He faces six counts of accessing Huobi’s computer systems and one count related to proceeds of crime. A lawyer for Chen, Lareina Chan, did not respond to a request for comment.

It is unclear how Huobi detected the transactions, although he reported Chen to the police in April of that year.

Huobi Global said, “Mr. Boliang Chen’s employment with Huobi Global ended in May 2020. We have no further comment regarding the charges against Mr. Boliang Chen and believe in the administration of the justice by the Hong Kong Special Administrative Region.

Law enforcement around the world has sought to police crypto markets more aggressively in recent years, making it clear that they view criminal laws that apply to traditional financial groups as applicable to cryptocurrencies.

Earlier this month, US prosecutors filed an insider trading case against a former employee of OpenSea, the non-fungible token (NFT) market. These assets have become prominent since their use in digital artworks.

Additional reporting by Ryan McMorrow in Beijing