Huobi Global, once China’s leading crypto exchange, has been retooled since exiting the domestic market following Beijing’s crypto ban. Now the company is close to being bought by an investment firm.
Huobi Global announced today that its controlling shareholder has completed the transaction to sell its entire stake to About Capital, a Hong Kong-based fund management firm started by Ted Chen, who founded Chinese hedge fund giant Greenwoods Asset Management. This confirms an earlier Bloomberg report that said founder Leon Li was looking to sell his majority stake for more than $1 billion, valuing the exchange at $3 billion.
Founded in 2013, Huobi Global led China’s crypto boom before Beijing outlawed all crypto transactions in 2021. Parent company Huobi Group now operates an umbrella of cryptocurrency-related entities, including leading exchange Huobi Global, the business arm funds Huobi Ventures, and a cloud crypto service.
Huobi Global and its rival Binance said they have stopped serving customers based in China following the ban. While Binance began global expansion long before the crackdown, Huobi Global appears to have been hit hard by the regulatory change, as a large portion of its users were still based in China. The trading platform is reportedly laying off 30% of its workforce this summer after its retreat from China cut into revenue.
The acquisition of Capital will not affect Huobi’s “core operations and business management teams,” the statement said. The exact amount of the deal was not disclosed, but it appears that the new parent company is providing much-needed capital to help the exchange overcome its financial woes and go global amid a crypto disaster.
According to About Capital, Huobi Global will “embrace a series of new international brand promotion and business expansion initiatives, including a global strategic advisory board with industry leaders, the injection of sufficient capital into a margin and risk fund, and measures to further strengthen competitiveness”.
“Following Huobi’s exit from the Chinese mainland market in 2021, we have accelerated our push to go global amid a challenging market environment, which adds to Huobi’s drive to seek a new shareholding structure with a global vision and international resources,” he says. Li. statement. “We believe that the successful acquisition by About Capital will contribute to Huobi’s global expansion on both sides.”