Digital asset exchange Huobi has announced that it will sell a majority stake to Hong Kong-based investment firm About Capital Management. In a blog post, the exchange assured users that there will be no disruption to the firm’s operations.
The deal will involve the controlling shareholder of Huobi Global and the buyout vehicle of About Capital, with other shareholders choosing to keep their holdings. According to a Bloomberg report, the largest Huobi shareholder is its founder Leon Li who has been shopping for buyers for his majority stake since the start of the year.
Details of the deal’s valuation were not made public, but there is speculation that the amount would be below market value as Huobi has endured a difficult time in recent months. Since the Chinese crackdown of 2021, the exchange has seen a sharp decline in its user base, with the bulk of customers in mainland China and dire macroeconomic factors forcing the firm to lay off 30% of its staff strength.
“We believe the virtual asset industry is still in its early stage and there is tremendous upside for long term growth. We are confident that the holistic approach to rebuild Huobi Global as the premier international virtual asset exchange would solidify both the recognition and trust of Huobi’s international users,” said Ted Chen, CEO of About Capital.
There have been some claims that Justin Sun, Tron’s founder, is the new owner of the exchange, but in a statement, Sun disclosed that he will only serve in an advisory role to “grow this innovative, vibrant, and resilient organization in its latest chapter for global expansion.”
Since the news broke, Huobi Token (HT) gained an impressive 27% in less than 24 hours.
International expansion on the horizon
The acquisition of a majority stake is poised to usher in a slew of benefits for the exchange. About Capital’s statement noted that it would inject new funds into Huobi to enhance competitiveness in the industry.
“Huobi Global will embrace a series of new international brand promotion and business expansion initiatives,” read the announcement.
Since the firm left China, its international push for new customers has been lethargic, riddled by a lack of capital, with its competition snagging up available market share. Binance had already begun international expansion before the Chinese crackdown, while Huobi was taken by surprise following the ban on digital asset activity in the country.
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