Huboi virtual currency images with world map in background

Huobi Korea wants to sever link with Huobi Global, plans to change name: report

Huobi Korea, a subsidiary of Huobi Global, is keen to end its relationship with its parent company as whispers of a liquidity crisis grows louder.

South Korean news outlet New1 reported that Huobi Korea is already moving to buy its shares from its parent company Huobi Global. The report claimed that Huobi Korea would carry out a name change as part of efforts to distance itself from its parent company.

At the moment, Huobi Global’s founder Leon Li holds around 72% of the shares, which Huobi Korea’s chairman Cho Kook-bong is keen on purchasing. Industry watchers believe there is a high chance that the deal will sail through, given Cho’s status as a major player in South Korea’s local virtual currency ecosystem.

Huobi Korea’s move to split from its holding company comes after multiple consultations with employees and relevant stakeholders, which it says “is a plan to strengthen its position as a domestic company.”

“Huobi Korea has suffered from foreign exchanges, especially with the image of a ‘Chinese exchange,’ It can be interpreted as trying to show that it is a ‘domestic exchange’ that is as safe as it is,” one industry insider stated.

South Korean regulators have upped the ante in ensuring the strict compliance of digital asset service providers in the country following the collapse of Terra and FTX. Part of the new rules for exchanges in the country includes the clear separation of client funds from the firm’s proprietary assets.

A difficult time for Huobi Global

Huobi Global has been enduring a rough patch since Chinese authorities imposed a blanket ban on digital assets in the country. The exchange that was ranked as the third-largest in terms of volume lost a chunk of its customers as it exited the Chinese market.

It embarked on an expansion drive into Southeast Asia and underwent a rebrand and an acquisition in under 12 months. However, the moves did little to fix the exchange’s challenges as things began unraveling at the seams.

Huobi recently confirmed that it would be laying off 20% of its staff to operate on a leaner budget as insiders confirmed that the firm had canceled its end-of-year bonuses and rewards for employees.

The exchange announced the size of its reserves, saying it stood at around $3 billion, but analysts pointed out that the bulk of the reserves was made up of its Huobi Token (HT), sparking comparisons with the embattled FTX exchange.

Watch: The Future of Digital Asset Exchanges & Investment

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