A local report from news firm news1, claims Huobi Korea has plans for a split from parent company Huobi Global. The subsidiary will purchase all shares from its parent body and go independent.
Huobi Korea to Change its Name
According to the release, the Korean subsidiary of the exchange platform intends to put stronger roots down in the region. As such, the company is set to acquire its shares from the main body. It also reportedly has plans to take on a new name. Notably, this is not a big departure from its former title as the report says it will settle on “Huobi.”
At the moment the majority percentage, over half of Huobi Korea shares belong to the co-creator of Huobi Global Leon Li. The purchase in talks would see the Chairman of Huobi Korea, Cho Kook-bong who is already a major shareholder take ownership of Li’s units.
News1 took care to note that Cho already owns a company in the crypto sector. Also, one of the nation’s biggest crypto mining ventures belongs to the Huobi Korea chairman, the report claimed.
Huobi Faces Off With Insolvency Rumors
The news of the purported split comes as Huobi battles various challenges as the crypto winter fails to let up. Very recently, Huobi Global denied rumors of insolvency, following significant layoffs.
Indeed, less than a week into the new year the exchange company recorded net outflows totaling $94.2 million.
Huobi later confirmed plans to let go of a fifth of its workforce, not 40% as the rumors had alleged. The company also clarified that the dismissals were part of ongoing remodeling following Tron founder Justin Sun’s acquisition of the firm.
Incidentally, some of Huobi’s troubles can be traced back to Sun’s aforementioned takeover. Majority shareholder Li relinquished the whole of his stake to Hong Kong-based asset management company About Capital Management. Apparently, Tron’s Justin Sun was the major investor.
The purchase saw some vital Huobi executives such as Chief Financial Officer Lily Zheng exit the company. Huobi embarked on its reorganization scheme shortly after this prompting rumors that the exchange was going to fold. Sun addressed these reports a short while ago affirming that the company’s business affairs are stable.
He also stressed that user assets are secure and provided assurance that Huobi will “fully respect the legal demands of local employees.”
PoR Report Prompted the Split, Says Report
Per the news1 publication, Huobi Korea took action due to concerns that followed the parent company’s December proof-of-reserves report. The report in question revealed that the exchange has over $3 billion in reserves, however, self-issued Huobi Tokens make up 43.3%.
News1 also stated that Huobi Global has, in the past, gotten in the way of business at its Korean branch. The latter reportedly halted transactions for 5 months in 2021. This was just after the implementation of the Special Financial Information Act saw its parent company change the corporate location of its headquarters.
Huobi Korea has reportedly already taken steps towards acquiring the shares in the possession of Huobi Global. According to the release, the firm intends to discuss a new mission over a call with internal and external employees. After gathering their thoughts, Huobi Korea will move to finalize the mission.