Leon Li, the CEO of the Huobi exchange, will sell his 60% stake in the company. The move is prompted by the exchange’s difficulties following the bear market and the banning of cryptocurrencies in China. Sam Bankman-Fried and Justin Sun are said to be among the potential buyers.
Huobi Global is sailing in troubled waters
Leon Li, the founder of the Huobi exchange, is in talks with various institutional investors to sell his 60% stake in the company. According to Bloomberg, the deal could raise Huobi’s valuation to $3 billion.
Leon Li’s intentions were briefly leaked at the beginning of July, when the platform found itself in serious trouble after it was forced to stop serving its Chinese customers due to local regulations. Huobi reportedly experienced a substantial drop in revenue, which could lead to the company laying off 30% of its staff in China, according to journalist Colin Wu (known as Wu Blockchain).
Sam Bankman-Fried, the CEO of FTX, and Justin Sun, the founder of Tron (TRX), are among the potential buyers. Justin Sun, however, refuted the facts reported by Bloomberg.
We have not engaged any matters related to the Bloomberg story at this moment.
– H.E. Justin Sun (@justinsuntron) August 12, 2022
For his part, Sam Bankman-Fried did not deny it. Such an acquisition on his part would make sense, as he stated last May that FTX could deploy “billions of dollars of acquisitions”, with the exchange’s cash flow being in good shape. He also proved his company’s financial capabilities by recently proposing the acquisition of Celsius Network and Voyager Digital.
Sale to be completed soon
According to people close to the matter who wished to remain anonymous, the sale of Leon Li’s shares could be effective by the end of August. Zhen Fund and Sequoia China, two of Huobi’s main backers, were notified of the founder’s decision at a meeting in July.
According to a company spokesman, who said few details could be disclosed at this time, Leon Li hopes the prospective buyers will be able to turn around the troubled exchange:
He hopes that the new shareholders will be more powerful and resourceful, and that they will value the Huobi brand and invest more capital and energy to drive Huobi’s growth.
The deal, which would generate a profit of around $1 billion, would be one of the largest in the history of cryptocurrencies.
Since the cryptocurrency ban in China, Huobi has expanded to Dubai, New Zealand, among other places, and plans to expand to the United States.
The exchange, which remains one of the largest in the market, averages over $1 billion in daily trading volume. Its token, HT, rose by 25% after the Bloomberg report was published. It is now trading at $5.3.
