Major digital asset exchange Huobi Global will soon have a new controlling shareholder in About Capital Management following founder Leon Li’s entire stake sale to the Hong Kong-based investment firm.
Li has been attempting to sell his 60% controlling interest since early August and while a price tag has not been disclosed, initial valuation was purportedly up to US$3bn.
Successful closure of the deal would make it among the largest ever in the cryptocurrency sector.
In a press release from Huobi Global, ACM chief executive Ted Chen called the investment in the exchange “the most significant acquisition deal of the year for the industry”.
Justin Sun, founder of the Tron blockchain and advisor to Huobi, added: “Having completed its exit from the mainland China market, Huobi Global will be embarking on a series of branding activities and business developments after the acquisition.
“Instead of releasing new tokens, our key focus will be on supporting the Huobi Token (HT) to strengthen its place in the virtual assets industry.”
While some outlets have cited Sun as the core investor behind ACM, he denied the claims to The Block.
HT token soars
Following the news, Huobi Global’s Ethereum-native token HT took off like a rocket, heading upwards of US$5.30 on a 30% daily pump.
The rally puts HT at a 44% discount year to date (YTD).
In comparison, Huobi Global’s retail investment competitor KuCoin’s KCS token is down approximately 60%, while bitcoin is down nearly 60% as well.
As is already being observed, HT will likely correct as the short-term sentiment boost calms down.
An overbought RSI could make a swift reversal likely – Source: huobi.com
An extremely overbought position on the relative strength index attests to that.
What is Huobi Global?
Huobi Global is a Seychelles-registered centralised digital asset exchange founded in China in 2013.
The exchange has an extensive global user base despite being prohibited in major jurisdictions including the US, Canada, Singapore and Japan, with daily trading volumes generally in the multi-billions.
Huobi tends to attract retail investors as opposed to institutional investors who gravitate towards Coinbase, Bitstamp and FTX.
Listing requirements are generally more relaxed. As such, the exchange has over 600 cryptocurrencies and over 1,000 trading pairs.
According to CoinMarketCap’s metrics, Huobi Global has the lowest liquidity rating out of the 15 largest digital asset exchanges.
Base maker and taker fees of 0.2% are reduced for holders of the native HT cryptocurrency.
Huobi Global and About Capital Management have been approached for a comment on the acquisition.