Huobi Korea is preparing to operate independently and disassociate from its parent firm, the giant cryptocurrency exchange Huobi Global.
Huobi Global is tackling insolvency rumours and expects to lay off some employees.
Huobi Korea intends to separate from its problematic parent company
On January 9, 2023, local news source News1 reported that Huobi Korea, the South Korean subsidiary of Huobi, would quit to be a part of Huobi Global and switch to a new name.
Huobi Korea will negotiate an equity deal with Huobi Global, whose founder, Leon Lin, owns more than half of Huobi Korea’s assets, as part of the separation process. Chairman of Huobi Korea Jo Guk-bong and Korea Real Estate Trust are some other notable stockholders.
The most recent development comes just after news broke that Huobi was planning to reduce its workforce by 20%, an allegation that Justin Sun, the founder of Tron and an advisor to Huobi Global, had previously rejected.
In response to the ongoing bear market, a representative for the cryptocurrency exchange told Reuters that it was essential to maintain a “lean staff.” There were reports that employees at the company were asked to switch their salaries from fiat to USDT or USDC stablecoins.
Stablecoins worth $100 million were sent to Huobi by Justin Sun.
Blockchain research company Nansen discovered that Justin Sun transferred stablecoins valued at $100 million from Binance to Huobi shortly after news of the planned employee layoff appeared.
The deposit occurred as the company’s net outflows surged by $60.9 million in only 24 hours.
The purpose of the transaction, as per Nansen’s data journalist Martin Lee, “Might be to help with the increasing withdrawals or maintain a level of confidence in the exchange.”
Earlier in January the native token of Huobi, HT, dropped 30% over the last 30 days due to the cryptocurrency exchange’s problems.