Dear Respected Hotbit Users：
Regarding ESC, the project that is recently listed on Hotbit Polaris, we have already received numerous comments and controversial feedbacks from our community. Hence, during this period, Hotbit has been conducting in-depth communications and investigations with the project team based on the demand of our users. On May 3rd, 2019, we are extremely shocked to reveal that the project team of ESC is involved in a series of deceptions and discreditable actions. As a result, Hotbit has decided to immediately terminate the trading of ESC. Meanwhile, we have decided to launch the reimbursement plan for users of Hotbit Polaris who are involved in this issue. We hereby announce the result of our investigation and our reimbursement plan as follows:
1. Based on the principle of fairness and justice, according to the request of the core team member of ESC, Mr. Cui, Hotbit had opened the deposit function of ESC before the project was officially listed on Hotbit Polaris. By the time Hotbit Polaris closed the deposit function of ESC on April 28th, 2019, Hotbit has received 185092298.921 ESC as deposit in total.
2. During his initial communication with Hotbit, the information that Mr. Cui disclosed was that, among all total volume of ESC tokens available for circulation outside of Hotbit Polaris, there were only several millions of ESC tokens sold to ESC’s early supporters by the price of 0.0025 USDT, and that all other ESC tokens available for circulation outside of Hotbit Polaris were sold to relevant investors by the price of 0.0035 USDT or a higher price. It was only based on the abovementioned condition that Hotbit has managed to gain the preferential treatment of a 20% bonus for early investors of ESC on Hotbit Polaris.
3. After the listing of ESC on Hotbit Polaris, the price of ESC fluctuates greatly. After in-depth investigation with the project team of ESC, we discovered that, after signing the agreement with Hotbit on behalf of ESC, without informing Hotbit, Mr. Cui has immediately sold 94,000,000 ESC to a certain investor by the price of 0.002 USDT (TXID: 0xb3756224ff5c87e1594f4f588242e9cb4eaa185dd73d0a484f1b3a2ca59fcb52). The abovementioned investor then immediately sold this amount of ESC to hundreds of different investors by different prices, which lead to the fact that a great volume of ESC tokens with very low prices (or even free ESC tokens) suddenly became available in OTC channels.
4. Meanwhile, the project team of ESC has also confirmed that Mr. Cui has also withdrawn 31,000,000 ESC (TXID: 0xd40771651a113aee4b929bdea18d2c7ce819c8e62bf3120e39cc07b26393faaf，0x17a8c2c5b7747a76f2e8300f3904144c7958ea51b380455c12a09d7ca4d58716， 0x1edaabda1f82e559a2b3e696645b7d753bb39b9b7f79ee465ccbd348789366fd) for market promotions. However, Mr. Cui has neither specified the detailed directions of the abovementioned amount of ESC nor returned any of his income to the accounting department. After thorough investigation, the abovementioned amount of ESC (31,000,000 ESC) has been transferred multiple times into around 100 different addresses first, then into Hotbit platform. Due to the fact that Mr. Cui refuses to disclose the detailed directions of the abovementioned amount of ESC, at this stage, Hotbit and ESC project team cannot confirm whether the abovementioned amount of ESC tokens is currently held by Mr. Cui himself or other new investors. Considering the fact that Mr. Cui did not return any of the income generated from the abovementioned amount of ESC to the accounting department of ESC (which worth 108,500 USDT), we are entitled to assume that it is very likely that the abovementioned amount of ESC (31,000,000 ESC) was deposited into Hotbit by no or very low cost.
5. After the trading of ESC opens on 15:00, April 27th, 2019, we have witnessed a great volume of sell-off transactions in ESC. Our statistics shows that, within the first hour of the opening of ESC trading, over 25,000,000 ESC tokens among all ESC tokens deposited into Hotbit were sold as sell-off transactions. As a result, on April 28th, 2019, Hotbit has urgently suspended the trading permission of 55 accounts that were potentially suspicious. Through our further communications and investigations with the project team members of ESC, (please refer to our 3rd and 4th statement as mentioned above), we realized that, due to the fact that the core team member of ESC, Mr. Cui, has concealed relevant important information regarding the price of the amount of ESC tokens in circulation outside of Hotbit, and that it is very likely that the core team member of ESC, Mr. Cui, will sell off all ESC tokens on hold for his personal interest, which will thus lead to the consequence that the risk of all our users who deposit their 185,000,000 ESC tokens into Hotbit become absolutely uncontrollable. Hence, during May 1st, 2019 – May 3rd, 2019, Hotbit has suspended the trading permissions of all Hotbit accounts that has deposited ESC into Hotbit. The number of the accounts involved is 391 in total.
6. During our investigation, the project team of ESC has provided us with relevant records of online discussions, which clearly show that the core team member of ESC, Mr. Cui, has demanded that the price of ESC to fall upon its listing on Hotbit Polaris over the oppositions of Hotbit and others. The abovementioned records of online discussions have already been confirmed by various project team members of ESC.
7. During our investigation, by conducting mutual audit with the project team of ESC, we have discovered that during the whole process, by taking the advantage of Mr. Cui’s control over the dealers, one of Mr. Cui’s fellow has conducted multiple profit-making transactions as well.
8. Consequently, based on that one of the core team member of ESC, Mr. Cui, is involved in the abovementioned deceptions and discreditable actions, the sustainability of the project ESC has been put at great risk. After negotiation with ESC project team, Hotbit has decided to immediately terminate the trading of ESC on Hotbit and launch the repurchase plan for the users of Hotbit Polaris who are involved in this issue.
9. The total income of ESC project team generated from the sales of ESC on Hotbit Polaris is calculated as 420000USDT+32520000HTB in total. By additionally injecting 50,000 USDT as repurchase capital on May 1st, 2019, after the current repurchase of ESC from ESC project team as maintenance, the total balance of ESC account on Hotbit Polaris is 81103USDT+32520000HTB, with 147,000,000 ESC repurchased. After negotiation with ESC project team, all remaining assets of ESC on Hotbit will be used to repurchase the amount of ESC held by those users who have participated in Hotbit Polaris’ purchase sessions in priority. The detailed plan is as follows: the ESC tokens held by all users who have participated in the purchase application of ESC/HTB on Hotbit Polaris will be repurchased based on the original price (1 ESC = 1.084 HTB), the amount to be repurchased for each user is based on either the current volume of ESC held by the user or the volume of ESC purchased by the user during ESC/HTB purchase session on Hotbit Polaris (see which volume is less than the other). Due to the fact that the ESC project team has repurchased a great volume of ESC deposited by various accounts into Hotbit platform, the remaining balance of USDT is not sufficient for us to repurchase all ESC by the original price of 0.0035 USDT for all users who have participated in the ESC/USDT purchase session of Hotbit Polaris. Regarding the further details of the repurchase plan for the users of ESC/USDT purchase session, we are currently communicating with the ESC project team. Please wait patiently for our solution.
10. Hotbit hereby strongly condemns the core team member of ESC, Mr. Cui, and urges Mr. Cui to return his unjust enrichment and compensate all user who have purchased ESC. However, we have also noticed that there are some other users who have purchased ESC from other exchanges and deposited this amount of ESC into our platform. We hereby also urge all other relevant exchanges to appropriately solve this problem and arrange timely reimbursement measures for all relevant users accordingly as well.
We apologize for any inconvenience caused！
Hotbit team
2019.5.4
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