Crypto exchange Huobi to lay off 20% of staff as industry reels from FTX collapse

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

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

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

“With the current state of the bear market, a very weak team will be maintained going forward.” Staff optimization aims to implement brand strategy, optimize structure, improve efficiency and return to the top three.”

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

Huobi’s native HT token sank to $4.3355 at one point on Friday, down more than 7% over the previous 24 hours, according to data from CoinMarketCap.

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

Investor flows poured in from centralized exchanges, with nearly 300,000 bitcoins moved between November 6 and December 7, according to the latest available data from CryptoQuant.

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

As much as $6 billion in digital tokens were withdrawn from the exchange between December 12th and December 14th.

In a so-called “proof of reserves” statement on November 25, the world’s largest crypto 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-reserves reports, which only offer a snapshot of the assets an exchange holds at a point in time.

Consultancy Mazars, which had compiled a separate proof-of-reserve report for Binance, stopped producing such documents for crypto firms altogether on December 16, citing “concerns about how these reports are understood by the public.”

Recently, crypto investors have expressed 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 what they perceive as negative or false information.

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

Huobi has completed a proof-of-reserve review, which shows that its total assets now stand at $2.9 billion and match the number of funds deposited by users, Sun said.

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

Huobi was originally founded in China, but was forced out of the country after Beijing’s intense crackdown on the crypto industry.

Today, Huobi only conducts consulting and research outside of 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