Huobi investors, including ZhenFund and Sequoia China, were made aware of the founder’s intentions at a shareholder meeting in July.
Chinese crypto mogul and Huobi group founder Leon Li is in talks with investors to sell his 60% stake in the crypto exchange at a valuation of $3 billion. Bloomberg reports that sources suggest that Li has had talks with several financiers. Tron founder Justin Sun and FTX’s Sam Bankman-Fried are among those said to have expressed interest in a share transfer.
A representative for Huobi confirmed this to Bloomberg, stating that “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 the growth of Huobi.” Justin Sun, on the other hand, refuted claims that he had been in talks with the Huobi founder about buying into Huobi.
The deal, if seen through, has the potential to become one of the crypto industry’s largest takeovers. According to the report, Li is aiming for a valuation of $2 billion to $3 billion which places the stake sale at a minimum of $1 billion. A deal could be concluded by the end of the month.
Huobi investors, including ZhenFund and Sequoia China, the latter being the second-largest shareholder, were made aware of Li’s intentions during a shareholder meeting in July.
Reports of Li’s decision to sell began early last month following the June 28 announcement banning Chinese users from the exchange. A subsequent revenue fall forced the company to announce pending layoffs that could “exceed 30 per cent”.
Once one of the top three crypto exchanges in the Asian market alongside Binance and OKX, Huobi has faced major setbacks including China’s ban on cryptocurrencies last year and the current nosedive of the crypto industry. At its peak in 2020, the exchange accounted for a quarter of the total market share, a figure that has significantly dropped to about 5 per cent today. It remains one of the top 10 exchanges globally with a daily trading volume of more than $1 billion according to CoinMarketCap.
Meanwhile, FTX has been on a buying spree during the crypto market downturn. The firm acquired Japanese exchange Liquid in April before moving on to the Canadian trading platform Bitvo. It also has a pending $240 million deal to purchase BlockFi while reportedly looking to snatch bankrupt Celsius Network and Voyager Digital.
Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student.
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