The value of Huobi’s native token has shot up around 18% in recent trading, following the news of fresh investment in the Seychelles-based crypto exchange.
Huobi’s founder Leon Li Lin recently sold off his stake in the company to About Capital, a Hong Kong-based asset management firm, which was accompanied by the promise of more investment.
According to a blog post on the company’s website, the move will see Huobi get a “sufficient” capital injection into its margin and risk provision fund, as well as a global strategic advisory board, joined by “leading industry figures.”
The acquisition will also reportedly see the company undergo a “series of new international brand promotion and business expansion initiatives,” with no specific mention of what this entails.
Though the acquisition will mean that Leon Li Lin will lose control over the firm, the announcement maintained the move will have “no impact on Huobi’s core operation and business management teams.”
Despite not being available for users based in the U.S. or China, Huobi is still one of the most popular cryptocurrency exchanges worldwide.
According to CoinGecko, Huobi is presently the eighth-most largest crypto exchange by 24-hour trading volume, with more than $465 million in normalized volume.
Huobi prepares for next chapter
About Capital was by no means the only party interested in acquiring Lin’s stake from him.
Recent reports suggest that FTX founder Sam Bankman-Fried and Tron founder Justin Sun were among the interested potential buyers, with the valuation for Li’s slice said to be between $2 billion to $3 billion.
Despite successfully winning the interest of investors, it hasn’t all been smooth sailing for the exchange in recent months.
HUSD, a stablecoin offered by the firm that is supposed to maintain parity with the U.S. dollar, at one point dropped almost 15% from its intended $1 peg. The firm maintained that the issue was caused by “a short-term liquidity problem” due to “a time difference in banking hours,” rather than any deeper financial instability.
Huobi has also been trimming down the selection of tokens it has on offer as part of plans to better fit in with global regulatory frameworks. It declined to comment any further on the reasons for the removals.
These tokens included Dash (DSH), Decred (DCR), Firo (FIRO), Monero (XMR), Verge (XVG), Zcash (ZEC), and Horizen (ZEN).
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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