Crypto exchange Huobi Global is looking to expand its presence worldwide after announcing the sale of Founder Leon Li’s controlling stake in the company to Hong Kong-based asset management firm About Capital.
The firm said that, under its new owners, Huobi would look to “embrace a series of new international brand promotion and business expansion initiatives”, including the formation of a global strategic advisory board led by leading industry figures, injecting sufficient capital into margins, and setting up a risk provision fund.
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“Huobi Global offers the best of breed virtual asset investment services to millions of international users. We believe the virtual asset industry is still in its early stage and there is tremendous upside for long term growth. We are confident that the holistic approach to rebuild Huobi Global as the premier international virtual asset exchange would solidify both the recognition and trust of Huobi’s international users,” said About Capital CEO Ted Chen.
Following the announcement of the deal, Huobi’s native token, HT, rose 22% in value, and is currently trading at $5.03 at the time of writing, according to CoinMarketCap.
The deal’s resolution comes after months of rumors surrounding Li’s intention to sell his stake. While the exact details of the deal were not disclosed, reports in August indicate that the acquisition could have been worth as much as $3 billion. FTX founder Sam Bankman-Fried and Tron founder Justin Sun were among those rumored to be interested in Li’s stake.
Huobi was once a top crypto exchange in China, where it was founded in 2013. However, the firm exited the Chinese market in 2021 after Beijing declared all crypto transactions illegal. According to Li, the blanket ban pushed Huobi to expand into other regions, which in turn necessitated changes to the company’s infrastructure and shareholding.
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“Following Huobi’s exit from the Chinese mainland market in 2021, we have accelerated our globalization push amidst a challenging market environment, which adds to the impetus for Huobi to seek a new shareholding structure with a global vision and international resources. We believe the successful acquisition by About Capital vehicle will contribute to Huobi’s global expansion in both aspects,” Li explained.
Huobi had also launched a U.S. exchange in 2018, but it was eventually forced to shut down due to management issues and regulatory risks. The firm now has plans to launch an asset management business in the region instead.
Huobi recently closed its exchange in Thailand, as the government revoked its license due to allegedly failing to comply with local regulations.
Huobi is among the top 10 largest, most trusted centralized exchanges on the market, according to CoinGecko, recording an average daily trade volume of approximately $500 million.
On the Flipside
- The exact details of the deal were not disclosed;
- Huobi’s plans to expand into other markets may be hindered by the bear market and associated regulatory risks.
- Its entry to other markets would put Huobi into competition with established exchanges such as Binance and Coinbase.
Why You Should Care
Huobi is one of the largest centralized crypto exchanges in the world. The company’s takeover, and subsequent plans to expand could potentially have a positive impact on users and crypto adoption in general.
Read about Huobi’s latest investments:
Huobi Ventures Invests in Magic Square to Transform the Future of Crypto
Learn more about Huobi’s ventures into the blockchain space:
Huobi Tech Establishes Huobi Tech Capital to Capture Opportunities in Web3.0, DeFi, and Metaverse
