In August 2022, Huobi Global founder Leon Li was looking to unload his 60% stake for $1 billion. He may have finally found a buyer: About Capital Management, which agreed to acquire a majority stake in Huobi through its Mergers and Acquisitions department.
About Capital Management is a fund management company based in Hong Kong. It focuses on long-term investments.
Huobi is one of the largest digital asset exchanges in southeast Asia and consistently ranks in the top ten exchanges by trading volume. It did not disclose the terms of the deal with About Capital Management. Huobi says trading operations won’t change, though its press release announcing the deal hinted that some internal adjustments might be made to transition daily operations, improve risk capital provision, and ensure stable management.
It’s common for a new parent company to take a new acquisition in a different direction or rebrand and integrate it with existing operations. FTX was quick to rebrand LedgerX as FTX US Derivatives after acquiring it, for instance.
The new majority stakeholders in Huobi Global say they intend to expand its international operations. Huobi left the China mainland market in December 2021 and stopped all trading activity for all Chinese accounts. Chinese users can still withdraw their funds.
In a press release announcing the change of ownership, Leon Li says Huobi had already started globalization efforts despite a “challenging market environment.” Bitcoin is still down by more than two thirds from its ATH of over $67,500. The collapse of TERRA and LUNA in May 2022 wiped out billions of dollars and caused a domino effect that led to the bankruptcies of Celsius Network, Voyager Capital, and Three Arrows Capital.
Naturally, the collapse attracted the vultures. FTX’s Sam Bankman-Fried expressed interest in acquiring assets owned by Celsius Network and Voyager Capital in the wake of their bankruptcies — sometimes maneuvering to give himself more leverage even before they filed for bankruptcy. He faced some pushback from Voyager Digital, who called his offer an insulting lowball bid, but managed to acquire some of Celsius Network’s assets. He also previously expressed interest in acquiring Huobi, though any negotiations probably fell through.
The revenue of most exchanges is probably way down since it tends to be based on the dollar value of their trading volume. (Yes, it is likely that some smaller exchanges pad their trading volume so they can charge higher listing fees for new coins and tokens.) The timing of Leon Li’s interest in finding a buyer for his stake in Huobi could hint that it got hit by the bad bear market as well, though it’s unknown whether About Capital Management gave him the full $1 billion asking price for it.