Huobi Korea announced plans to gain autonomy from the parent company. The split will allow its chairperson Cho Kook-Bong to assume a significant ownership stake from co-founder Leon Li.
Huobi Korea revealed plans to change its name after the successful split.
Huobi Korea Plans to Gain Autonomy
The plans to split from Huobi Global were revealed in a January 9 post by New1, a South Korean media platform. The article indicated that Huobi Korea’s exchange plans to acquire shares from Huobi Global. The post indicated that Leon Li would cede 72% of the stake in Huobi Korea. The News1 lauded Kook-bong’s input in the digital assets ecosystem through his ownership in the major crypto mining activities in Korea.
The article illustrated that Huobi has recently battled several issues. It added that the crypto exchange encountered a $6 million outflow prompting the January 6 announcement of a 20% layoff of employees.
Troubled Operations at Huobi Global
Huobi Global challenges started before the past week’s outflow. In particular, speculations of Huobi indicated troubled experiences in the quest to become the blockchain hub of South Korea. Circulating rumors illustrated Huobi was dropped by its global partners in late 2022 from the Busan project. Further scrutiny indicated that Justin Sun bought off Li’s stake in Huobi Global in October.
Also read:A series of internal challenges have threatened to dislodge Huobi Korea among the leading crypto exchanges in Korea. Earlier reports by News1 indicated that Huobi Korea ranked second in January 2021 when receiving certification from the Korea Internet and Security Agency. Kook-Bong admitted that sustaining the pole position mandates splitting from Huobi Global.
Reserves Vulnerable to Self-Issued Token
News1 post observed that such a decision is fueled by the revelation that the proof-of-reserves assessment report conveyed in December. The report showed that while Huobi Global reserves exceed $3 billion, a significant amount, estimated at 43.3%, are self-issued Huobi Tokens (HT). Besides, the report pointed out that the platform’s stablecoin (HUSD) slipped from the $1 peg in August.
Meanwhile, Huobi Global confirmed in November its plans to relocate its headquarters to Seychelles. The relocation coincided with the Huobi completing a partnership with Poloniex in a November 30 announcement terming it strategic.
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