Analyst Colin Wu reported that Justin Sun was the ultimate beneficiary of the deal to purchase a controlling stake in the exchange by About Capital Management

Media calls the TRON founder the real buyer of Huobi

10.10.2022 - 09:45

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3 min

What’s new? The founder of the TRON blockchain platform Justin Sun has become the ultimate beneficiary of the deal to purchase a controlling stake in crypto exchange Huobi by Hong Kong-based investment company About Capital Management (ACM), analyst Colin Wu reports, citing his own sources. Sun had previously denied any information about plans to buy the exchange, but on October 10 it became known that he joined Huobi’s global advisory board. Other members of the board are ACM CEO Ted Chen, Huobi Global co-founder Du Jun, Hong Kong University of Science and Technology Vice President Wang Yang, and Valkyrie Investments CEO Leah Wald.

Wu Blockchain’s material

What else does the journalist report? According to Wu, the purchase price of Huobi was $1 billion. The analyst called ACM a “bridge” for the sale of the exchange to Sun, as Huobi co-founder Leon Li worried that this move could affect his safety due to discontent from the Chinese authorities. Sun, for his part, feared outrage from crypto exchange Binance, which supports him.

Leon Li began negotiating the sale of his stake in the company in August. Back then, according to Bloomberg, the possible buyers included the head of the FTX crypto exchange Sam Bankman-Fried and Justin Sun. Both denied this information, but Colin Wu writes that the head of FTX invested in the purchase of Huobi to help Sun. As a result of the deal, ACM takes a 60% stake in Huobi. The parties themselves have not disclosed its amount, with Li previously stating that he hopes to raise up to $3 billion.

What is known about Sun? He is a Chinese cryptocurrency entrepreneur who founded the TRON blockchain in 2017. He is also the CEO of BitTorrent, a torrent client. He is known for winning an auction for the right to dine with billionaire and investor Warren Buffett, and giving him a bitcoin during the meeting. Sun paid $4,57 million for the meeting.

What preceded it? Huobi’s revenues dropped significantly in September 2021 due to the blocking of users from China as required by the local government. As reported by Wu, the exchange was previously the second most profitable, with more than $1 billion.

Huobi was founded in 2013 in Beijing. It is currently based in Seychelles, with offices in Hong Kong, South Korea, Japan, and the United States. The second-largest shareholder of the exchange is the Chinese division of the US venture capital fund Sequoia Capital. The platform hosts 649 cryptocurrencies and 972 trading pairs. The daily trading volume is $452,86 million. The native token, Huobi Token (HT), is used to receive fee discounts, as well as additional rewards and bonuses. As of October 10, 08:00 UTC, HT is trading at $5,06, having gained 22,9% per day. Its market capitalization is $647,1 million, according to CoinGecko.

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