- Huobi co-founder Leon Li successfully recovers blocked deposits from the bankrupt FTX exchange.
- Sinohope, Li’s investment holding company, retrieves over 100% of the frozen assets through a strategic deal.
- “This recovery marks a significant milestone for Sinohope and its stakeholders,” said Leon Li.
Discover how Huobi’s co-founder Leon Li navigated the complexities of FTX’s bankruptcy to reclaim blocked assets, offering a beacon of hope in the volatile crypto market.
What’s Happening at Huobi?
During FTX’s bankruptcy in November 2022, Sinohope had $18.1 million trapped. The new agreement allows the recovery of 108% of these assets. Sinohope faced significant financial challenges due to the unrecovered funds, projecting a loss of 280 million Hong Kong dollars for the first nine months of 2023. This included corporate deposits worth $86 million Hong Kong dollars left dormant in FTX. To mitigate the impact, Leon Li offered a $14 million personal credit line to support Sinohope customers affected by the FTX collapse. Additionally, on December 11, 2023, Li’s other company, X-Spot Global, secured an injunction against Huobi Global to cease the use of the Huobi brand’s Chinese equivalent in Hong Kong.
Details of the Process
Court documents indicate that the Huobi brand was registered in Hong Kong in 2019. By September 2022, Leon Li and Du Jun had sold Huobi Global to About Capital Management, linked to Justin Sun. Before this transaction, rights to the Chinese Huobi brand were transferred to Leon Li’s X-Spot Global, making it the brand owner. Subsequently, Huobi rebranded to HTX in September.
Key Insights from the Case
FTX’s bankruptcy had a significant financial impact on Sinohope, necessitating personal financial intervention from Leon Li. The rebranding of Huobi to HTX was tied to legal actions and ownership transitions involving the Huobi brand. The sharp rise in cryptocurrency prices amid a bull market has increased the value of claims by FTX creditors, with recovery estimates ranging between 129% and 143%. The resolution of this case marks a pivotal moment for those affected by FTX’s bankruptcy, demonstrating recovery possibilities in the volatile crypto market.
Conclusion
The successful recovery of blocked assets by Leon Li and Sinohope underscores the resilience and strategic acumen required to navigate the tumultuous crypto landscape. This case not only highlights the potential for asset recovery in the face of financial adversity but also sets a precedent for other entities grappling with similar challenges. As the crypto market continues to evolve, stakeholders must remain vigilant and proactive to safeguard their investments and capitalize on emerging opportunities.
