Occasioned by the prevailing market conditions, popular cryptocurrency exchange, Huobi, has now decided to sell some of its big investments. As per emerging reports, its founder, Leon Li, has started talks with numerous investors to sell the stakes for as high as $3 billion. The founder intends to sell nearly 60% of the exchange, and the agreement is expected to be completed before the end of August.
If the deal goes through, it will become the biggest takeover in the industry since the beginning of the ongoing bear market. Now, top actors in the industry, such as Sam Bankman-Fried and Justin Sun, Tron’s founder, have reportedly considered the possibility of acquiring the stakes. However, as of press time, none of them has given any official confirmation.
Huobi’s spokesperson confirmed that Leon Li discussed a potential sale of the exchange with several institutions. According to the spokesperson, Leon believes the incoming shareholder must act effectively and creatively. Li hopes to have a good outing in the quest to ensure the sale of the shares. This, according to him, tends to bring in funds for the purpose of fostering Huobi’s expansion. However, the exchange promises to continuously update the public as the deal unfolds.
Huobi is enduring the harsh implications of the crypto winter
Renowned as the most prominent exchange in Asia, Huobi reportedly amassed over 25% market share at its 2020 peak. However, the market shares have fallen to about 5% due to the ongoing market turmoil. Recently, the exchange laid off about 30% of its staffs after the Chinese government halted cryptocurrency transactions in the country. The firm’s condition became worsened after the move by the Chinese authorities. This further reduced the revenue generated by Huobi, thereby plunging it into a minor crisis. The exchange lamented that its expenditure is becoming greater than its revenue. In a bid to cut costs, Huobi moved to shut some of its oversea offices.
However, the crises in the crypto industry is not limited to Huobi alone. The likes of Coinbase, Celsius, Voyager, Gemini, Bybit, Crypto.com, Bitso, BlockFi, and others endured similar challenges and have equally laid off their employees. Celsius, for instance, halted withdrawals, deposits, and other operations on its network last June. The lender recently filed a chapter 11 bankruptcy protection as a measure toward recovering from the crisis. It also embarked on numerous restructuring processes.