By SI Linwei
Huobi Token (HT) soared 80 percent when cryptocurrency exchange Huobi Global sold its majority stake to About Capital. When the acquisition was announced, the price jumped to US$7.68 (55.6 yuan) on October 14 from US$4.26 a week before and has stayed around that level since. HT had traded at around US$10 before this summer's crypto crash.
Crypto exchanges issue tokens to facilitate trading and governance. Unlike crypto coins (Bitcoin, Ethereum), they are tied to the platform and often come with benefits such as voting rights or discounts. BNB, issued by the largest exchange Binance, has a total market value of US$45 billion, the fifth highest of all tokens.
Focus on empowerment
Huobi Global issued a statement on October 8 that its controlling shareholder has agreed to sell its entire holding to Hong Kong-based asset management firm About Capital. Bloomberg reported in August that founder Huobi Global Leon Li was looking to sell his stake. ZhenFund and Sequoia Capital, both early investors, were aware of the negotiation. The acquisition amount has not been disclosed and Huobi Global has declined to comment.
About Capital CEO Ten Chen said he was “very pleased to complete the transaction,” and that “the virtual asset industry is still in its early stage and there is tremendous upside for long-term growth.” He is also co-founder of the hedge fund Greenwoods Asset Management.
About Capital has installed an advisory board of industry leaders and will set up sufficient capital reserves for expansion. Of the six advisory board members, the most notable is H.E. Justin Sun, founder of Tron, a blockchain-based platform that hosts entertainment applications. He was believed to have funded the acquisition, a rumor he has denied on multiple occasions.
The board met virtually on October 10, when Sun said Huobi Global would focus on “empowering HT,” and that there was no plan to return to China. The company exited its home country after China’s cryptocurrency ban in 2021, which by some estimates slashed its revenue by a third and caused layoffs.
All-consuming commitment
Sun’s Twitter profile now lists Huobi Global Advisor among his many titles. For about a week, he posted daily about meetings and decisions, but the updates have since become spottier, supposedly because the work is too exciting and all-consuming.
When questioned whether his appointment was part of a pump and dump scheme, he said he personally holds a million HT and wouldn’t sell any until the token enters the top three. Huobi Tokens are currently worth about US$1 billion, 53rd in the world.
