crypto strategy

Crypto’s Latest Mystery Is Ownership of Leading Huobi Exchange

(Bloomberg) — In the vexing world of cryptocurrencies, the seemingly simple question of who owns an exchange can be fiendishly tricky.

Bloomberg’s Most Read

Take Huobi Global, a platform with Chinese roots that has faded from global leadership but still commands a notable daily trading volume of over $300 million, according to tracker CoinGecko. Huobi Global said last month that co-founder and majority shareholder Leon Li had sold his stake in the company to a buyout company run by About Capital Management HK Co.

People familiar with the matter, who asked not to be identified while discussing private information, said Chinese-born crypto tycoon Justin Sun spent around $1 billion to acquire the stake of around 60% through Hong Kong-based asset manager About Capital. Sequoia China and ZhenFund also sold their combined 28% stake in Huobi Global to About Capital, the sources said.

According to the people, Sun kept his name out of the deal to avoid scrutiny from China, where crypto is mostly banned. Yet Sun has repeatedly denied any involvement in the sale of Huobi Global, while a Huobi Global spokesperson denied that Sun was the buyer. Sun’s official position at Huobi Global is that of Advisor.

Calls to the contact number on About Capital’s website for comment were not returned, and there was no immediate response to emails to its general query address. Spokespersons for Sequoia China and ZhenFund declined to comment.

Sun’s involvement in the acquisition was first reported by online outlet Wu Blockchain.

The Huobi Global ownership conundrum comes at a time when the grim slide into bankruptcy of Sam Bankman-Fried’s crypto exchange giant FTX has put a spotlight on transparency in the digital asset industry. Huobi Global is one of a host of platforms that have pledged to disclose asset reserves to clarify the status of depositors’ funds.

Challenging environment

“In the current environment, centralized exchanges are difficult to trust, let alone if their ownership structure is unclear,” said Wayne Zhao, partner and analyst at research house TokenInsight.

Sun, 32, founded the Tron ecosystem, whose eponymous native token is one of the top 20 virtual tokens by market value. According to his own account, Sun is worth over $25 billion in Bitcoin, other crypto tokens, US dollars, and treasury bills.

He has already donated nearly $4.6 million to have dinner with Warren Buffett and suggested in a Bloomberg Television interview before FTX’s bankruptcy that Tron could help save the platform. In December, he said he was becoming a diplomat for the Caribbean nation of Grenada and had resided there since 2019.

In his advisory role, Sun laid out his vision for Huobi Global on Twitter, including establishing a stronghold in Asia — especially with the Chinese-speaking community — and prioritizing the exchange’s HT utility token.

Volatile Token

He told his followers in a tweet in Chinese last month that “you can rest assured I won’t harvest you” until Huobi Global is again among the top three exchanges. In Chinese crypto circles, newcomers to the space are referred to as “leeks” that are “harvested” by seasoned investors like Sun.

The price of the HT token more than doubled after the announcement of Li’s stock sale on Oct. 8, but then plunged to pre-trade levels, according to CoinGecko. Sun said in an interview with Bloomberg Television in October that he owned “tens of millions” of HT tokens.

“Justin’s playbook is always about fan bases and the attention economy,” said Bowen Wang, co-founder of venture capital firm Smrti Lab, who has known Sun since 2017. it will attract enough attention, it will benefit from the appreciation of the HT token.”

Sun is due to discuss Huobi Global’s plans for a new branding, global expansion and regulatory compliance at a briefing in Singapore on Tuesday. The invitation to the event, which lists a press conference as well as a panel interview and dinner with Sun, says he is attending in his capacity as an adviser to the company.

Bloomberg Businessweek’s Most Read

©2022 Bloomberg LP

#Cryptos #Latest #Mystery #Ownership #Leading #Huobi #Exchange #crypto strategy

Related Articles

Back to top button