Huobi (HTX) co-founder Leon Li’s Hong Kong investment holding company Sinohope will recover more than 100% of its blocked deposits in the bankrupt crypto exchange FTX through its subsidiary Hbit. According to the May 24 announcement circulated on May 28, Hbit sold creditor claims worth $19.5 million to debt investment company Ceratosaurus Investors LLC.
What is Happening on the Huobi Front?
During the November 2022 bankruptcy, 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 for the first nine months of the year.
Part of the loss included $86 million Hong Kong dollars 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 line to rescue Sinohope customers affected by FTX’s bankruptcy.
On December 11, 2023, another company owned by Leon Li, X-Spot Global, obtained a precautionary measure 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 most FTX creditors’ claims, which are mostly in cryptocurrency. Current estimates for FTX’s damage recovery rates range from 129% to 143%.
