Huobi (HTX) exchange co-founder Leon Li’s Hong Kong investment holding company Sinohope, through its subsidiary Hbit, will recover more than 100% of the blocked deposits in the bankrupt crypto exchange FTX. According to the May 24 announcement circulated on May 28, Hbit sold $19.5 million worth of creditor claims to debt investment company Ceratosaurus Investors LLC.
What’s Happening on the Huobi Front?
During the bankruptcy in November 2022, Sinohope had deposits worth $18.1 million in FTX. The agreement means the firm will recover 108% of its assets. Sinohope was financially affected by the unrecovered funds. On December 13, 2023, the firm announced it expected a loss of 280 million Hong Kong dollars in the first nine months of the year.
Part of the loss included $86 million Hong Kong dollars worth of corporate deposits left inactive in the bankrupt crypto exchange FTX. To keep the firm afloat, Leon Li had to personally extend a $14 million personal credit limit to rescue Sinohope customers affected by FTX’s bankruptcy.
On December 11, 2023, another company owned by Leon Li, X-Spot Global, obtained an injunction against Huobi Global, demanding that Huobi Global stop using the Chinese equivalent of the Huobi brand in Hong Kong.
Details on the Process
According to court records, the Huobi brand was registered in Hong Kong in 2019. In September 2022, co-founders Leon Li and Du Jun sold Huobi Global to About Capital Management, an entity linked to Justin Sun. However, before the acquisition, the rights to the Chinese Huobi brand were fully transferred to Leon Li’s X-Spot Global company, making it the owner of the brand. Huobi later rebranded as HTX last September.
Amid the ongoing bull market, the sharp rise in crypto prices increased the value of claims by FTX creditors, most of which were in cryptocurrency. Current estimates of FTX’s damage recovery rates range between 129% and 143%.
