Beijing: Amid a slump in the crypto market and China's crackdown on the sector, the founder and controlling shareholder of one of the world's largest cryptocurrency exchanges, Huobi Global, has agreed to sell his entire stake to a Hong Kong-based asset management firm.
The decision was announced in a statement on Huobi's website on Saturday, but the seller was not named. On the same day, the company's founder, Leon Li Lin, confirmed in a personal WeChat post that he would transfer ownership to Capital Management.
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“I am no longer a shareholder of Huobi Global and have no right to Huobi Global, directly or indirectly,” Li said in the post, adding that the new controlling shareholder “will bring a new impetus to the globalization of the company.”
According to the company's statement, Huobi intends to "adopt a range of new international brand promotion and business expansion initiatives" following the transaction, which will include capital injection. According to the company, the transaction will have no impact on Huobi's core operations or business management teams.
No one has disclosed the size of the transaction or Huobi's current valuation. Huobi and About Capital did not immediately respond to requests for comment.
Huobi, a leading global cryptocurrency exchange, was founded in Beijing in 2013 by Oracle veteran Li. However, it is facing action from the Chinese government on the sector.
After China banned bitcoin exchanges in 2017, Huobi began moving its servers and employees out of the mainland, although some Chinese users were still able to access Huobi's services.
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Huobi has since stopped allowing users to register new accounts with mainland China mobile phone numbers and halted derivatives trading in the country to better comply with Chinese regulations.
After China banned cryptocurrency mining last year, Huobi was one of the first Chinese-founded platforms to suspend the sale of bitcoin mining services and mining equipment in the country.
According to Colin Wu, an influential blogger who writes about blockchain and cryptocurrencies, Lee, who controls more than half of Huobi's shares, was looking to sell his stake in August.
According to Wu, Huobi's revenue declined after "all Chinese users were wiped out".
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Huobi's business has also been affected by cryptocurrency sales. Bitcoin, the world's largest cryptocurrency by trading volume, was trading below $20,000 on Friday after peaking at over US$67,000 in November.
The company's Hong Kong-listed subsidiary Huobi Technology reported a loss of HK$48.8 million (US$6.2 million) for the six months ended March 31, down from a profit of HK$54.1 million the previous year. Revenue increased 34% to HK$351.8 million.
