Crypto trade Huobi plans to put off 20% of its workforce

The Huobi crypto exchange logo displayed on a smartphone.

Nikolas Kokovlis | Nurphoto via Getty Images

Digital currency exchange Huobi said on Friday it plans to cut its global headcount by about 20% in the latest round of layoffs to hit the ailing cryptocurrency industry.

The Seychelles-based company is one of the largest crypto exchanges in the world, processing approximately $370 million in trading volume in a single day, according to data from CoinGecko.

“The planned layoff rate is about 20%,” Justin Sun, a member of Huobi’s advisory board, told CNBC, adding that the cuts have not yet been implemented.

“In the current bear market, a very lean team will be maintained in the future. The workforce optimization aims to implement the brand strategy, optimize the structure, improve efficiency and get back into the top 3.”

According to a Financial Times report, Huobi had about 1,600 employees worldwide as of October.

According to CoinMarketCap data, Huobi’s native HT token fell as low as $4.3355 on Friday, down more than 7% from the previous 24-hour period.

Following the collapse of FTX, crypto traders are looking for clues as to which company will be the next victim of the digital asset downturn.

Floods of investors have poured out of centralized exchanges, with almost 300,000 bitcoins being moved from Nov. 6 to Dec. 7, according to the latest available data from CryptoQuant.

Last month, Binance briefly suspended USDC stablecoin withdrawals, raising concerns about its own ability to cover customer redemptions. It has since resumed USDC withdrawals.

Up to $6 billion in digital tokens were pulled from the exchange between December 12th and 14th.

In a so-called “Proof of Reserves” statement on Nov. 25, the world’s largest crypto exchange announced that it had a reserve ratio of 101%, indicating that it had more assets than liabilities.

Doubts have been raised about the effectiveness of reserve statement reports, which only provide a snapshot of the assets an exchange is holding at any given point in time.

Consulting firm Mazars, which prepared a separate proof of reserve report for Binance, stopped preparing such documents for crypto firms entirely on Dec. 16, citing “concerns about the way these reports are understood by the public.”

Recently, crypto investors have expressed doubts about Huobi’s financial health.

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Sun dismissed concerns about the company’s solvency as “pure FUD,” meaning “fear, uncertainty, doubt,” a phrase crypto investors use to describe what they perceive as negative or incorrect information.

“User assets are secure,” he said. “As a virtual asset trading platform that has been operating for 10 years, Huobi’s business philosophy is to protect the security of its users’ assets.”

Huobi has conducted a reserve review showing its total assets are now $2.9 billion, matching the number of funds deposited by users, the Sun said.

Huobi was acquired by About Capital Management, a Hong Kong-based wealth management firm, on Oct. 7. Sun, who founded the Tron blockchain project, is an advisor to Huobi.

Huobi was originally founded in China, but was forced out of the country after Beijing cracked down on the crypto industry.

Today, Huobi only conducts consulting and research from China, while its trading operations are conducted outside of mainland China. The company has offices in Hong Kong, South Korea, Japan and the United States

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