In the vexing world of cryptocurrencies, the apparently straightforward question of who possesses an exchange can end up being devilishly precarious.
Take Huobi Global, a platform with Chinese roots that has blurred from worldwide initiative yet at the same time orders notable daily trading volume of more than $300 million, as per tracker CoinGecko. Huobi Worldwide said last month that co-founder and controlling shareholder Leon Li had offered his stake in the company to a buyout firm managed by About Capital Management HK Co.
Individuals acquainted with the matter, who asked not to not be recognized examining private data, said China-born crypto magnate Justin Sun spent about $1 billion to gain the generally 60% shareholding through the Hong Kong-based asset manager About Capital. Sequoia China and ZhenFund additionally sold their combined 28% stake in Huobi Worldwide to About Capital, said the people.
The people said Sun kept his name out of the deal to avoid scrutiny from China. Sun denied any involvement in Huobi Global’s sale, while a Huobi Global spokesman denied that Sun was the buyer. Sun is an adviser at Huobi Global. There was no response to emails to its general query address or calls to the contact number on the About Capital website. People for ZhenFund and Sequoia China wouldn’t comment.
Take Huobi Global, a platform with Chinese roots that has faded from global leadership but still commands notable daily trading volume of over $300 million, according to tracker CoinGecko. Huobi Global said last month that co-founder and controlling shareholder Leon Li had sold his stake in the company to a buyout firm managed by About Capital Management HK Co.
According to the people, Sun kept his name out of the deal to avoid scrutiny from China, where crypto is mostly banned. Yet Sun has repeatedly denied any involvement in Huobi Global’s sale, while a Huobi Global spokesperson denied that Sun was the buyer. Sun’s official position at Huobi Global is as an adviser.
Calls to the contact number on About Capital’s website for comment weren’t returned, and there was no immediate response to emails to its general query address. Spokespeople for Sequoia China and ZhenFund declined to comment.
Sun’s involvement in the acquisition was first reported by online outlet Wu Blockchain. The puzzle over Huobi Global’s ownership comes at a time when the murky slide into bankruptcy of Sam Bankman-Fried’s giant crypto exchange FTX has put a premium on transparency in the digital-asset sector. Huobi Global is among a slew of platforms that have vowed to disclose asset reserves to boost clarity about the status of depositor funds.
“It’s tough in the current environment to have faith in centralized exchanges, let alone if their ownership structure is unclear,” said Wayne Zhao, a partner and analyst with research house TokenInsight.
Sun, 32, founded the Tron ecosystem, whose eponymously named native token is a top 20 virtual coin by market value. By his own account, Sun is worth more than $25 billion in Bitcoin, other crypto tokens, US dollars and Treasury bills.
He once donated almost $4.6 million to dine with Warren Buffett and suggested in a Bloomberg Television interview before FTX’s bankruptcy that Tron could help rescue the platform. In December he said he’s becoming a diplomat for the Caribbean nation of Grenada and had been resident there since 2019.
In his advisory role, Sun has laid out his vision for Huobi Global on Twitter, including establishing a stronghold in Asia — especially with the Chinese-language community — and prioritizing the exchange’s utility token HT.
He told his followers that he wouldn’t harvest them until Huobi Global is a top-three exchange again.
In Chinese circles, newcomers to the space are referred to as “leeks” who are “harvested” by seasoned investors like Sun. The price of the HT Token more than doubled after Li sold his shares.
According to CoinGecko, 8 plunged to levels that prevailed before the transaction. Sun said in an October interview that he has a lot of money.
The co-founder of Smrti Lab, who has known Sun since last year, said that Sun is always about fan bases and the attention economy.
Sun is due to discuss Huobi Global’s plans for a new branding strategy, global expansion and regulatory compliance at a briefing in Singapore on Tuesday. He is attending in his capacity as an adviser to the firm, according to the invitation to the event.
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