EXCLUSIVE: Huobi founder Li Lin is looking to sell his stake in Huobi. Li Lin currently holds more than 50% of the shares. The second largest shareholder of Huobi is Sequoia China. Huobi’s revenue plummeted after it wiped out all Chinese users and is laying off staff. https://t.co/67KOlW9aT9
— Wu Blockchain (@WuBlockchain) July 1, 2022
Huobi is downsizing
Due to the recent downfall in the crypto market, many exchange platforms immediately cut down expenses to survive the winter. Downsizing was the first choice of such crypto companies.
In the middle of June, a firing trend spread within the crypto market, where many crypto companies laid off up to 25% of their staff. Moreover, many are already secretly insolvent and will completely fail soon, according to FTX founder Sam Bankman-Fried.
Huobi is one of the exchanges that experience difficulties. On June 28, the exchange announced that it banned all Chinese users. As a result, Huobi’s revenue fell significantly, which pushed the company to take precautions.
Huobi is expected to lay off around 30% of its staff, which equates to 300 people. A company spokesperson commented on Huobi’s financial troubles and said:
“Due to the current market environment, Huobi Global is in the process of reviewing both its hiring policies and its current manpower, with the goal of re-aligning them to its operational needs. Further to such review, layoffs are a possibility.”
Huobi expelled its Chinese users in September 2021 as well. Upon removal, the Huobi token also hit its 8-month lowest.
Huobi’s expansion plans
In February 2022, Huobi publicly spoke of its plans to expand in the U.S. market.
The company ceased U.S. operations four years ago to comply with the regulations at the time. Huobi’s co-founder Du Jun talked to CNBC in February about their future endeavors, which included setting up headquarters in Europe and expanding to the U.S.
“In 2018, we tried to enter the U.S. market but we quickly withdrew ourselves because we didn’t have a strong commitment to the market at that time and we didn’t have a good management team in the U.S.
I expect asset management to be a bigger business than exchange, which echoes the traditional finance market as well. I don’t think exchange is a necessary element for entering the U.S.”
While disclosing the specific services Huobi will aim to provide, Jun added that the company would return to the U.S. in a more “integrated and impactful” fashion.
At the time, Bitcoin was traded for around $40K to $45K. At the time of writing, Bitcoin is priced at $19,490.