Huobi cryptocurrency exchange logo displayed on a smartphone.
Nikolas Kokovlis | Nurphoto via Getty Images
Cryptocurrency exchange Huobi on Friday said it plans to reduce its global headcount by around 20%, in the latest round of layoffs to hit the beleaguered crypto industry.
The Seychelles-based company is one of the largest cryptocurrency exchanges globally, handling around $370 million in trading volume in a single day, according to data from CoinGecko.
“The planned layoff rate is around 20%,” Justin Sun, a member of Huobi’s advisory board, told CNBC, adding that the cuts have yet to be implemented.
“With the current state of the bear market, a lean team will be maintained in the future. Optimizing personnel to execute brand strategy, optimize structure, improve efficiency and back to the top three.”
Huobi has about 1,600 employees worldwide as of October, as reported by the Financial Times.
According to CoinMarketCap data, Huobi’s native HT token at one point fell as low as $4.3355 on Friday, down more than 7% from the previous 24 hours.
After the collapse of FTX, crypto traders are looking for clues as to who will be the next company to fall victim to the downturn for the digital asset.
Investors flocked out of centralized exchanges, with nearly 300,000 bitcoins moving out between November 6 and December 7, according to the most recently available data from CryptoQuant.
Last month, Binance Withdrawals are temporarily suspended of USDC stablecoin, promoting concerns about its own ability to cover customer acquisitions. Since then, it has continued to withdraw USDC.
Up to $6 billion in digital currency was withdrawn from the exchange between December 12 and December 14.
In the so-called “reserve evidence25, the world’s largest cryptocurrency exchange revealed that it has a reserve ratio of 101%, indicating that it has more assets than liabilities.
Doubts have been raised about the effectiveness of proof-of-reserve reports, which only provide a snapshot of the assets an exchange holds at a single point in time.
Mazars Consulting, which compiled a separate proof of reserve report for Binance, stop producing such materials altogether to crypto companies on December 16, citing “concerns about how the public interprets these reports.”
Recently, crypto investors have raised doubts about Huobi’s financial health.
Sun dismissed concerns about the company’s solvency as “pure FUD,” meaning “fear, uncertainty, doubt,” a phrase crypto investors use to describe describe what they consider negative or misleading information.
“Users’ assets are safe,” he said. “As a virtual asset trading platform that has been in operation for 10 years, Huobi’s business philosophy is to protect the safety of users’ assets.”
Sun said Huobi has completed a proof-of-reserve review that shows its total assets now at $2.9 billion and matches the amount deposited by users.
Huobi was acquired by About Capital Management, a Hong Kong-based asset management firm on October 7. Sun, the founder of blockchain project Tron, is an advisor to Huobi.
Huobi was originally founded in China, but it was kicked out of the country following a fierce crackdown from Beijing on the crypto industry.
Today, Huobi only conducts consulting and research outside of China, while its trading operations are operated outside of mainland China. The company has offices in Hong Kong, Korea, Japan and the US
