Huobi Group founder Leon Li is engaged in talks with a group of investors as the Chinese entrepreneur is looking to sell his majority stake in the crypto exchange at a valuation between $2 billion to $3 billion, according to a Bloomberg report.
People close to the matter, said FTX founder Sam Bankman-Fried and Tron founder Justin Sun are among the investors who have held preliminary talks with the Huobi boss.
Li is reportedly seeking to sell about 60% of the firm. A potential deal could bring the Huobi founder more than $1 billion, making it one of the biggest in the crypto industry to date.
Huobi's existing investors, including ZhenFund and Sequoia China, were reportedly informed about Li’s intentions during a shareholder meeting in July, with one person saying that a deal could be completed before the end of the month.
“He [Li] hopes that the new shareholders will be more powerful and resourceful, and that they will value the Huobi brand and invest more capital and energy to drive the growth of Huobi,” a Huobi Global told Bloomberg, declining to disclose additional details.
HT, the native token of the Huobi exchange, has also jumped to $5.56 from $4.45 following the Bloomberg report, before backtracking to $5.31 by press time.
This still represents a massive increase of more than 19% in value over the past day, per CoinMarketCap.
Huobi Global, FTX, and Tron did not immediately respond to Decrypt’s request for comment.
Bear market takes toll on Huobi
Founded in 2013, Huobi was forced out of China amid a crackdown on the crypto industry last year and is currently registered in Seychelles.
With a trading volume of over $1 billion in the past 24 hours, it is now one of the world's largest crypto exchanges.
Reports of the Huobi founder looking to sell his stake in the firm first appeared in early July when China-based crypto journalist Colin Wu broke the news on Twitter.
“With a profit of more than $1 billion in 2021, Huobi may be the most profitable exchange in the world after Binance in 2021, and it holds many compliance licenses. But when the market is down, it may be difficult to sell higher value,” Wu wrote at the time.
With a profit of more than $1 billion in 2021, Huobi may be the most profitable exchange in the world after Binance in 2021, and it holds many compliance licenses. But when the market is down, it may be difficult to sell higher value.
— Wu Blockchain (@WuBlockchain) July 1, 2022
Prior to that, Wu reported that due to the sharp drop in revenue after the removal of all Chinese users, Huobi was preparing a workforce cut, which may exceed 30% of the firm’s staff.