On the evening of June 10, Zhang Jiang, an EMABA student at Changjiang Business School and former partner of Bitcom, revealed in the “Yangtze EMABA27 Official Group” that Biti founder Hui Wei died on June 5, only 42 years old.
According to public information, Huiyi was once equal to the EMBA of China University of Science and Technology and Cheung Kong Graduate School of Business. From 2003 to 2008, he was a senior researcher at the IBM China Research Center and a senior product manager at Microsoft. Since 2008, a number of companies have been established, including the Internet financial platform “Flower and Fruit Finance” and “God and Wealth” and Bitcom, which is widely known in the currency circle.
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100 times leveraged burst, choose suicide
According to Babbitt, Bitcom is a blockchain market data analysis and service platform that provides digital market investors with professional market analysis tools, data indicators and risk management strategies to help investors effectively control the risk of digital currency investment. At the same time, we also provide professional services such as market data monitoring, project risk monitoring, illegal transaction discovery and monitoring for regulatory agencies and industry research institutions. Products include data analysis tools, BITEYE, and data open platforms.
From the project and product introduction, Bitcom does not seem to be the main business.
According to the information circulating on the Internet, Hui Yu suspected to have used the customer's 2000 BTC , and used 100 times leverage to make a short position, eventually choosing to commit suicide.
According to the BTC's current price of 56,000 yuan, the capital loss caused by the explosion of the warehouse exceeded 100 million yuan.
"Do not add leverage to the speculative coins, and hope that the currency circle will be less tragedy."
"May the dead rest in peace and cherish life. The opposite of leverage and futures is high risk, and the entrepreneurial gambling and resilience are balanced and cherished."
"The platform is essentially a pool of funds + leverage. It seems to be a case of commonality. The commonality is the humanity behind it; finally, you can have a good night's sleep, and Laohui will go all the way."
In the face of bad news, Hui's life friends and investors in the circle mourned and reminded the risks of leverage and futures.
The so-called lever refers to the user's self-sustaining principal borrowing money for two-way trading, in order to incite multiple funds, usually the multiple of the platform setting is 3 times or 5 times, which means that you have 1 BTC, through the lever You can borrow up to 2 or 4 BTCs at a time. When you buy a BTC and buy it with the borrowed principal, you can get 3 or 5 times the actual gain. Of course, if the BTC falls, the losses will almost simultaneously increase.
Futures or contracts refer to virtual contract products that are settled in BTC or other virtual currency. Take the OKEX contract as an example. Each BTC contract represents a BTC of $100. Investors can obtain by buying a long contract. The gains from the rise in the price of virtual digital currencies, or the short gains from the sale of virtual digital currencies. The leverage ratio of the contract is 10 or 20 times.
When the user opens the contract, he needs to mortgage a certain percentage of the deposit to the platform, and at the same time, automatically calculate the margin rate. When the leverage is 10 times, the margin rate is less than or equal to 10%; when the leverage is 20 times, the margin rate is less than or equal to 20%, which will trigger a forced liquidation, commonly known as a burst.
Roughly calculated, if the BTC is up to 10 times the leverage of the BTC bullish contract, when the BTC falls 10%, the user will open the position. Huixi uses a 100-fold lever to open the space. If the warehouse operation is full, when the BTC price increases by 1%, the funds in the account will be lost.
It can be seen that the leverage futures amplify the gains and also amplify the risks.
In the digital currency trading market with huge fluctuations, if the lever is easily used, once the wrong direction is judged, the loss will be huge.
In order to win the soft investment in China, the latter denied
In April 2018, a news report from Softbank China and Lanchi Venture Capital jointly invested in “Bit Yi” appeared in major blockchain media and venture capital media.
Many media have interpreted Bitcom as the first blockchain project invested by Softbank China in China , which has attracted the attention of insiders.
However, on the evening of June 5, Softbank China's PR told the media that Softbank China did not invest in Bitco.
“Bit is the proposed investment project that Softbank China has contacted last year, but as early as the end of last year, Softbank China has finally given up its investment plan and did not actually make this investment. Bite is not a invested enterprise of Softbank China.”
According to Bite's official website, Bitcom's operating entity is Beijing Biyi Data Services Co., Ltd., and Babbitt subsequently inquired about the latter's shareholder information and found that the investors are all individuals, no institutional investors, and no Softbank China. The figure.
“Hey, they all announced that they have added Softbank China investment.” A person who heard that Softbank China did not participate in the investment in Bitcom complained in a WeChat group.
"The currency circle has been routinely set," and another coin circle "old leeks" seems strange.
Who will bear the loss of user funds?
"Softbank said that there is no investment, which investor can go to chase?" A senior blockchain practitioner replied to Babbitt.
After all, most investors choose to put their funds in Bitcoin, which is largely due to the endorsement of Softbank China.
As the founder of the company, Huiyi is able to control the 2000BTC by itself. It can also be seen that there are huge loopholes in the risk control department of the platform.
"I think the platform is extremely irresponsible. The 2000BTC fund has no hosting and risk control mechanism. It is terrible and difficult to understand."
"He should have a basic sense of risk control. How can tens of millions of funds be opened 100 times, and it is obvious that the exchange will be harvested."
More users suspect that this may be a self-directed hacking incident.
"This person used to be very accurate. He should have made a lot of money. Why did you commit suicide when you broke the position?"
A Bitcom investor gave feedback to Babbitt, who had previously “showed positions” and accurately predicted the market in the investment crowd .
At present, Huihui’s family has not released the obituary of Hui’s death. The Biti company has not issued official news. The cause of death of Huiyi is still confusing, and how to compensate for the loss of 100 million yuan from customers is also a problem.
From 2013 to 2015, Internet finance became a business venture. At this time, Huiyi has successively established two Internet financial platforms, and Huaguo Finance and Shenxian have wealth.
At that time, he said in an interview with the media, "In the past two years of P2P, many questions have not been answered, such as platform exit mechanism, industry supervision rules, etc., this industry is full of awe."
The risk of the currency circle is several times higher than that of P2P, especially with leveraged futures.
"I remembered that he had to enter this circle two years ago and specifically talked to me because it was troubled by the supervision of the online loan industry. I said that this jungle law is even more dangerous. You must pay attention to avoid playing leveraged futures and selling technical traffic. That's it, I didn't expect to have an accident on this, and the desire is the devil!" said a friend of Huixi.