Crypto exchange Huobi plans to lay off 20% of its workforce

The Huobi crypto exchange logo displayed on a smartphone.

Nikolas Kokovlis | Nurphoto via Getty Images

Digital currency exchange Huobi reportedly said Friday it plans to cut its global headcount by about 20% in the latest round of layoffs that would hit the ailing cryptocurrency industry.

The Seychelles-based company is one of the largest crypto exchanges in the world, processing approximately $370 million in trading volume in a single day, according to data from CoinGecko.

A company spokesman told Reuters that Huobi has a “planned layoff rate” of about 20%. Bloomberg and the Financial Times also reported on the layoff plans on Friday.

“Given the current state of the bear market, a very lean team will be maintained going forward,” Huobi’s spokesman told Reuters.

Justin Sun, who is a member of the company’s advisory board, described the move to Reuters as a “structural adjustment” that has not yet begun and is expected to be completed in the first quarter.

Huobi was not immediately available for comment when contacted by CNBC. Sun had not responded to a direct message on Twitter at the time of publication.

According to a Financial Times report, Huobi had about 1,600 employees worldwide as of October.

According to CoinMarketCap data, Huobi’s native HT token fell as low as $4.3355 on Friday, down more than 7% from the previous 24-hour period.

Following the collapse of FTX, crypto traders are looking for clues as to which company will be the next victim of the digital asset downturn.

FTX collapse shakes crypto to its core.  The pain may not be over yet

Floods of investors have poured out of centralized exchanges, with nearly 300,000 bitcoins trading from Jun 11 to Dec 7, according to the latest available data from CryptoQuant.

Last month, Binance briefly suspended USDC stablecoin withdrawals, raising concerns about its own ability to cover customer redemptions. It has since resumed USDC withdrawals.

As much as $6 billion in digital tokens were exchanged between 12/12 and Dec 14.

In a so-called “Proof of Reserves” statement dated Feb. 11. On Feb. 25, the world’s largest crypto exchange announced that it had a reserve ratio of 101%, suggesting that it had more assets than liabilities.

Doubts have been raised about the effectiveness of reserve statement reports, which only provide a snapshot of the assets an exchange is holding at any given point in time.

Consulting firm Mazars, which prepared a separate proof of reserves for Binance, alleged the creation of such documents for crypto firms on 12/16, citing “concerns about the way these reports are understood by the public.”

Huobi was acquired by About Capital Management, a Hong Kong-based asset management firm, on Oct. 14. 7. Sun, who founded the Tron blockchain project, acts as an advisor to Huobi.

Huobi was originally founded in China, but was forced out of the country after Beijing cracked down on the crypto industry.

Today, Huobi only conducts consulting and research outside of China, while its commercial operations operate outside of mainland China. The company has offices in Hong Kong, South Korea, Japan and the United States

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