Huobi Korea to Break Off from Parent Company amid Insolvency Rumors

UTC by Mayowa Adebajo · 2 min read
Huobi Korea to Break Off from Parent Company amid Insolvency Rumors
Photo: Depositphotos

The Korean-based entity will take up a new name, and henceforth, operate independently from Huobi Global.

Crypto exchange Huobi Korea is reportedly gearing up to part ways with its parent company Huobi Global. According to News1, Huobi Korea will also seek to change its name as part of the separation process.

Huobi Korea to Distance Self From Huobi Global’s Alleged Troubles

For what it’s worth, Huobi Korea appears to be making such quick plans in the wake of uncertainties about Huobi Global that arose in the end of 2022. In November, the parent company published a proof-of-reserves that immediately raised concerns. Of its over $3 billion worth of reserves, its self-issued Huobi Token (HT) makes up a whopping 43.3%.

By January, rumors also broke about the crypto giant planning to terminate the employment of 20% of its staff. That was within the same week that the exchange was also reported to have seen a net outflow of nearly $61 million within just 24 hours.

Not a bit impressed by the situation, Huobi Korea now hopes to go on its own way. This means that if all goes as planned, the Korean-based entity will take up a new name, and henceforth, cease to operate as a branch of Huobi Global.

Currently, Huobi Global cofounder Leon Li owns the largest shares in Huobi Korea — a  whopping 72%. However, Huobi Korea is already intensifying efforts to purchase the shares to see that ownership is transferred to Huobi Korea’s head, Cho Kook-bong.

Parent Company Tries to Allay Fears

Meanwhile, the parent company continues to debunk the reports of a looming danger, including the planned layoffs. The exchange also continues to put in efforts to maintain investors’ confidence in it.

To this end, Tron founder, Justin Sun, who was also recently appointed as an advisor to the exchange, has stepped in to save the day. According to a blockchain research firm Nansen, Justin Sun recently transferred $100 million worth of stablecoins from Binance to Huobi. And from all indications, the transfer would hope to achieve two things. Firstly, to help with the increased demand for withdrawals, especially following the massive net outflow that just occurred. The other is to send a signal to investors that Huobi remains as stable as ever.

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Mayowa Adebajo

Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.

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