On January 9, reports circulated that the cryptocurrency exchange Huobi Korea announced plans to sever its relationship with its parent company Huobi Global.
According to the statement shared by News1, Huobi Korea will change its name to divorce itself from Huobi Global, as they have been facing a lot of problems due to domestic regulations.
Huobi Global is a cryptocurrency exchange founded in 2013 by Du Jun and Leon Li, the company’s current CEO. At the time, Huobi was one of the largest exchanges in the world, competing head-to-head with Binance and Coinbase. It currently ranks 16th among the top exchanges, according to CoinMarketCap.
Huobi Korea To Buy All Shares Held By Huobi Global
According to News1, Cho Kook-bong, the current chairman of Huobi Korea, is making all the arrangements to buy all the shares of Huobi Korea, the vast majority (about 72%) of which are owned by Leon Li.
Once all the shares are purchased, Huobi Korea will rebrand to “draw a line with Huobi Global.”
Although Huobi executives did not touch on the issue of the company’s native HT token, it is noticeable that it has dropped nearly 25% in the past 30 days following rumors of the company’s insolvency and the announcement of massive layoffs.
Huobi Korea Has Faced Multiple Problems Due To Its Link With Huobi Global
One of the most important reasons why Huobi Korea decided to distance itself from Huobi Global is due to regulations, as in 2021, the exchange had to suspend all transactions for five months to comply with regulations following a change in Huobi Global’s corporate location.
Huobi Korea wants to prove that it can be a safe “domestic exchange” by dropping its image of “Chinese exchange,” according to an employee currently working for the exchange.
“Huobi Korea has suffered from foreign exchanges, especially because of the image of a ‘Chinese exchange’. It can be interpreted as trying to show that it is a ‘domestic exchange’ that is as safe as it is.”
Huobi Global is working to regain the trust of its users.
As CryptoPotato recently reported, Justin Sun, founder of the Tron blockchain and current member of Huobi Global’s advisory board, confirmed rumors of mass layoffs of the company’s staff, urging people to ignore all the FUD about the company’s insolvency that caused multi-million dollar withdrawals at the end of December 2022.
On January 8, Huobi Global announced a bounty program using Sun’s image to tackle the communication problems that caused many investors to leave the company.
According to Sun, Huobi Global users will be able to directly ask Huobi’s technical support any questions “about the assets, functions, and operations” of the exchange at any time.
“The team will regularly evaluate criticisms and suggestions on various aspects, such as experience, and those who adopt the implementation will be rewarded with great gifts and reward packages.”
Although the layoffs are happening, Huobi Global is working to regain users’ trust, which right now is the most important thing for any exchange, especially after the multi-million dollar collapse of FTX.