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Hong Kong’s About Capital Management Finally Acquires Huobi Exchange

Speculations about the takeover of China’s one-time largest cryptocurrency exchange, Huobi, have been finally put to rest. By becoming the largest shareholder of the company, About Capital Management now takes control of the once-second-largest cryptocurrency exchange in the world.

Consistent with prior rumors and speculations, the founder of Huobi, Li Lin sold all his stakes, which reflects the majority of the entire stake of Huobi to the new owners, About Capital Management. As of the time of writing this report, there remain some original minority stakeholders who have not given up their shares and remain as part of the owners of the company. Nevertheless, About Capital Management, with its new status can unilaterally decide on the activities of the company.

About Capital Management is based in Hong Kong and its business focuses on asset management. It was founded by Chen Yihua, popularly called “TedChen”, and operates on a lowkey status, akin to being an under-the-radar asset management company. Chen founded About Capital Management in 2013. Apart from About Capital Management, he is also involved with other investment companies including Jinglin Assets, where he is a partner.

In terms of personal achievements, Chen holds an MBA degree from the Australian Graduate School of Management. He has won the three-year Overseas Golden Bull Private Equity Investment Manager (Stock Long-Short Strategy) Award, and now he becomes the flagship owner of the newly acquired Huobi in conjunction with other shareholders in About Capital Management.

The acquisition of the Huobi exchange did not happen without a series of back and forths, where several potential buyers appeared on the scene. In an earlier post, we reported that some individuals and companies had been linked with the acquisition exercise. FTX/SBF, Justin Sun, and Binance were mentioned among the early discussants over the selling of the Huobi exchange. According to reports by a popular Chinese tech journalist, the final decision to sell the company to a Hong Kong-based entity is driven by both political and security factors.

Some of the factors mentioned include the reluctance of the now former owner of Huobi, Lin Lin’s reluctance to leave China, his being subjected to investigation by the police in 2020, and the unsustainability of cryptocurrency-related businesses in China in 2022.

The investigation by the police, where Li Lin and others were arrested by the local police in Shanxi was the beginning of the complications that culminated in the removal of Chinese users from the Huobi platform in 2021. This action eventually caused a significant drop in revenue for the exchange, leading to the laying off of staff and other bureaucratic challenges.

Although Li Lin chose to remain in China, Huobi as a company spread its tentacles and established a presence in different parts of the world. With more than 20 million users across the globe, Huobi currently holds compliance licenses in multiple regions such as the United States, Hong Kong, South Korea, and Japan.

This acquisition by About Capital Management adds to the administrative changes that have been observed within Huobi recently. A few weeks ago, Huobi Technology, a key component of Huobi which is also listed in Hong Kong was renamed to “New Huo Technology Holdings Limited”. This was one event that reinforced the rumor at the time that a takeover was imminent.

Finally, the takeover has been completed. Leading to this takeover completion, a huge amount of Bitcoin was observed to have been transferred between wallets in the Huobi exchange. A newly created address received about 15,000 BTC, while 4,000 BTC was transferred to another address.

 

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