Huobi Korea to Split from Parent Company. Details
- Leon Li, the cofounder of Huobi Global, holds more than half of the shares in Huobi Korea.
- Huobi Global recently announced plans to commence a 20% layoff in a bid to cut down on costs.
- Research firm Nansen revealed that Justin Sun recently transferred $100 million worth of stablecoins from crypto exchange Binance to Huobi.
Huobi Korea, the Korean arm of the crypto exchange, Huobi Global, is making plans to function independently from its parent company and is set for a name change. Local sources revealed that the Korean-based exchange is planning to purchase its shares from Huobi Global.
Leon Li, the co-founder of Huobi Global, reportedly owns 72% of the shares in Huobi Korea, but buying the shares will see Huobi Korea chairman Cho Kook-bong take over Li’s share and seal the breakaway. As of January 2021, Huobi Korea was the second-largest crypto exchange in Korea.
The news of a split comes days after it was reported that Huobi Global was looking at laying off some employees to cut costs amid alleged financial concerns. Huobi’s financial woes have been an open secret since last year. Despite numerous denials, things became clearer in October after Li sold his shares in Huobi Global to major investor, Justin Sun. The exchange was also dropped as a partner in the city of Busan blockchain project alongside other companies.
Blockchain research firm Nansen revealed that Sun transferred $100 million worth of stablecoins from the crypto exchange Binance to Huobi shortly after the news of the 20% layoffs emerged. Sun’s cash injection came after Huobi saw a massive outflow of over $60 million within 24 hours.
Experts believe Sun’s injection could be a move to match the growing withdrawals and retain confidence in the exchange. Liquidity has become a huge topic in the crypto community since the fall of the FTX exchange in early November.
The exchange, which with Binance held a huge share of the market, filed for bankruptcy on November 11 after facing liquidity problems. A tweet from Binance CEO Changpeng Zhao sparked a wave of massive withdrawals, and FTX was unable to match the increased demand.
Things have progressed since then: FTX has lost its grip on the market, while its executives found themselves on the wrong side of the law. While Bankman-Fried’s associates, Caroline Ellison and Gary Wang, pleaded guilty to wrongdoing, the FTX founder surprisingly chose to plead “not guilty.” A court date is slated for later this year.
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