Cryptocurrency exchange Huobi lays off 20% of workforce

The logo of cryptocurrency exchange Huobi displayed on a smartphone.

Nikolas Kokovlis | Nurphoto via Getty Images

Digital currency exchange Huobi on Friday reportedly said it plans to reduce its global headcount by around 20%, in the latest round of layoffs to target the beleaguered cryptocurrency industry.

The Seychelles-based firm is one of the largest cryptocurrency exchanges globally, handling around $370 million in trading volume in a single day, according to data from CoinGecko.

A company spokesman told Reuters news agency that Huobi had a “planned layoff ratio” of around 20%. Bloomberg and the Financial Times also reported on the layoff plans on Friday.

“With the current state of the bear market, a very lean team will be maintained in the future,” a spokesman for Huobi told Reuters.

Justin Sun, who serves on the company’s advisory board as a member, described the move to Reuters as a “structural adjustment” that had not yet begun and was expected to be completed by 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.

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

Huobi’s native HT token at one point fell as low as $4.3355 on Friday, down more than 7% from the previous 24 hours, according to data from CoinMarketCap.

After the FTX crash, cryptocurrency traders are looking for clues as to which company will fall next to the digital assets downturn.

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Floods of investors have piled up from centralized exchanges, with nearly 300,000 bitcoins moved from Nov. 6 to Dec. 7, according to the most recent data available from CryptoQuant.

Last month, Binance briefly suspended withdrawals of the stablecoin USDC, prompting concerns about its ability to cover customer refunds. It has since resumed USDC withdrawals.

Up to $6 billion in digital tokens were withdrawn from the exchange between December 12 and 14.

In a so-called “proof of reserves” statement on Nov. 25, the world’s largest cryptocurrency exchange revealed that it had a reserve ratio of 101%, indicating it had more assets than liabilities.

Questions have been raised about the effectiveness of reserve test reports, which offer only a snapshot of the assets held by an exchange at a single point in time.

Consulting firm Mazars, which had compiled a separate reserve-proofing report for Binance, stopped producing such documents altogether for cryptocurrency firms on Dec. 16, citing “concerns about how these reports are being understood by the public.” “.

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

Huobi was originally founded in China, but was expelled from the country after an intense crackdown by Beijing on the cryptocurrency industry.

Today, Huobi only does consulting and research outside China, while its business operations are run outside mainland China. The company has offices in Hong Kong, South Korea, Japan and the United States

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