Leon Li, the CEO of the exchange Huobi, is going to sell his stake in the company, 60% of the shares. A decision motivated by the difficulties encountered by the exchange following the bear market and the banning of cryptocurrencies in China. Sam Bankman-Fried and Justin Sun are among the potential buyers.
Huobi Global is sailing in troubled waters
Leon Li, the founder of the Huobi exchange, is currently in talks with various institutions and investors to sell his 60% stake in the company. According to Bloomberg, the deal could bring Huobi’s valuation to $3 billion.
Leon Li’s intentions had briefly leaked in early July, as the platform found itself in deep trouble following its obligation to stop serving its Chinese customers due to local regulations. Huobi reportedly experienced a substantial drop in revenue at the time, which may actually lead to it laying off 30% of its staff in China, according to journalist Colin Wu (known as Wu Blockchain).
Sam Bankman-Fried, the CEO of FTX, and Justin Sun, the founder of Tron (TRX), are reportedly among the potential acquirers. Justin Sun, however, refuted the facts reported by Bloomberg.
For his part, Sam Bankman-Fried did not deny it. Such an acquisition on his part would make sense, as he declared last May that FTX could deploy “billions of dollars of acquisitions”, the exchange’s cash flow being in good shape. He also proved his company’s financial capabilities by recently proposing the buyout of Celsius Network and Voyager Digital.
A sale soon to become a reality
According to people close to the matter who wished to remain anonymous, the sale of Leon Li’s shares could be effective by the end of August. Zhen Fund and Sequoia China, two of Huobi’s main backers, were notified of the founder’s decision at a meeting in July.
According to a company spokesman, who said few details could be revealed at this time, Leon Li hopes the prospective buyers will be able to turn around the troubled exchange:
“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 Huobi’s growth.”
The deal, which would generate a profit of around $1 billion, would be one of the largest deals done in the history of cryptocurrencies.
Since the cryptocurrency ban in China, Huobi has expanded to Dubai, New Zealand and plans to expand to the United States, among other places.
The exchange, which is still one of the largest in the market, averages more than $1 billion in volume traded daily. Its token, HT, saw a 25% increase after the Bloomberg report was published. Its price is now $5.3.