(Kitco News) -
Huobi, the fourth-largest cryptocurrency exchange in the world, announced on Wednesday that Huobi Korea is already an independent entity, but that Huobi plans to continue to operate alongside its former subsidiary in the country.
Huobi issued a press release to clarify the relationship between the two crypto firms after a local media report published Jan. 9 claimed that Huobi Korea was still their subsidiary but had plans to become an independent company.
“Huobi Korea has begun preparations to purchase shares held by Huobi Global and change its name,” the report said, adding that the company plans to consult with internal and external stakeholders on a new name.
“Huobi Korea is not a subsidiary of Huobi, and its shares belong to the former Huobi Global's shareholders and have no relationship with Huobi,” Huobi wrote in response.
Last October, Huobi founder Leon Li sold his entire stake in Huobi Global to About Capital, a Hong Kong-based investment firm that is reportedly led by Tron founder Justin Sun. The restructuring was announced soon afterward, and Sun was added to Huobi’s advisory board.
Huobi said that About Capital's acquisition did not include Huobi Korea's shares, which remained under the control of the other Huobi Global shareholders “and were divested in the corporate structure.”
“In November 2022, Huobi Global completed a brand upgrade, updating its brand name to Huobi and proposing to develop its operations in various regions around a global development strategy,” they wrote. “Huobi has no relationship with Huobi Korea and is unaware of their upcoming plans in the region.”
Huobi added that “Korean users have always been able to transact through the main Huobi website” and they intend to continue to serve customers in Korea and throughout the region.
Like other crypto exchanges, Huobi has been under increasing financial stress as doubts about its reserves spur customer withdrawals amid the overall weakness of the digital currency market. On Jan. 6, Huobi confirmed plans to lay off 20% of its employees as part of an ongoing restructuring process.
A Huobi spokesperson told Kitco Crypto that the exchange plans on moving forward with “a very lean team” amid the ongoing bear market. “The personnel optimization aims to implement the brand strategy, optimize the structure, improve efficiency and return to the top three,” they said.
The exchange also pushed back against rumors of its insolvency and reiterated statements made by Sun, who recently tweeted that the financial state of the exchange was good and user assets were fully protected.
The announced layoffs came a week after journalist Colin Wu first reported that the exchange was looking to trim costs and begin paying employee salaries with stablecoins instead of fiat currency, eliciting protests from staff.
These latest developments, combined with the struggles of other prominent exchanges within the crypto ecosystem, have led many to recommend that crypto holders remove their tokens from Huobi and other embattled platforms and self-custody them instead.
Data from DeFiLlama shows that the Total Value Locked (TVL) on Huobi has decreased from $3.56 billion on Dec. 15 to a low of $2.88 billion on Friday, a decline of roughly $680 million. At the time of writing, Huobi’s TVL was $2.98 billion.
Huobi was founded in 2013 and remains the largest digital asset exchange in China.
