The acquisition process of Huobi by Hong Kong Baiyu Acquisition Fund
The rumors of Huobi being acquired have finally been confirmed.Author: Colin Wu, Wu Says
Wu Says has learned exclusively that in the early hours of October 8, Huobi officially completed financial reconciliation and signed the delivery, being acquired by the merger fund under Hong Kong's Baiyu Capital, which has become the largest shareholder and actual controller. The acquisition primarily involves the shares of Huobi's founder, Li Lin. To finalize this transaction, it is said that Li Lin has been almost sleepless for several consecutive days. The specific amount and the contributors of the merger fund have not yet been confirmed. Du Jun previously told Wu Says that he has not sold his shares and remains a minority shareholder.
Official information indicates that the holding company of HuobiGlobal has transferred all of its shares in HuobiGlobal to the fund under Baiyu Capital, making the merger fund the largest shareholder and actual controller of HuobiGlobal. This transaction only involves a change in the controlling shareholder and will not affect the existing core management and operational team.
The official website shows that Hong Kong Baiyu Capital (About Capital Management) is an asset management company founded by Chen Yihua in 2008. He is also a partner at Jinglin Asset and holds an MBA from the Australian Graduate School of Management. He has received the three-year overseas Golden Bull Private Equity Investment Manager (Long/Short Equity Strategy) award. Baiyu Capital is low-key and mysterious, with almost no "meaningful information" visible on its website, possibly hiding shareholders or actual controllers behind it.
Huobi was founded in 2013 and received investments from Sequoia Capital, ZhenFund, and others. With the growth of the cryptocurrency market, Huobi's market share gradually increased, becoming the largest exchange in the Chinese-speaking world after 2017, with an overall ecological layout leading its competitor OK. Huobi University and Huobi Investment have good reputations, with annual profits reaching billions of dollars. Until 2020, Binance regarded Huobi as its biggest competitor. However, its founder Li Lin stepped back from frontline management due to physical and psychological factors.
The Shanxi incident in 2020 became a turning point, leading to Huobi's complete withdrawal from the Chinese market in 2021 and a final change in Li Lin's mindset. Unlike OKX founder Xu Mingxing, who chose to go abroad, Li Lin stayed in China "for his family." After completely withdrawing from the Chinese market in 2022, Huobi faced certain operational difficulties and began layoffs, during which the mining business incurred significant losses (though it later recovered), solidifying Li Lin's intention to sell more than 50% of his shares.
Huobi has over 20 million users and holds compliant licenses in the U.S., Hong Kong, South Korea, Japan, and other regions, still representing a good asset. There are rumors that the acquisition valuation is $3 billion. It is reported that in the early stages of negotiation, Sun Yuchen, FTX/SBF, and even Binance were involved. In late August, Huobi changed its employee email from Huobi.com to htx-inc.com, sparking rumors of an SBF acquisition (though it was just a false alarm). Insiders revealed that due to political and regulatory factors, buyers based in Hong Kong appeared more suitable.
In addition to the Huobi Global exchange, another important asset of Huobi is the Hong Kong-listed company Huobi Technology. On September 21, Huobi Technology issued a board circular, proposing to rename the company to "New Huo Technology Holdings Limited," believing that changing the company name will give it a new corporate image and identity, benefiting the group's future business development. The ownership of Huobi Technology has not yet been determined.
As October began, the transaction entered its final stages. On October 5, a large amount of Bitcoin was transferred in four batches between Huobi wallet addresses, with approximately 15,000 BTC eventually flowing into a recently created address, and 4,000 BTC transferred to another Huobi address. On September 22, about 43,000 Bitcoins circulated internally within Huobi, mistakenly believed to be transferred to Binance. This is suspected to be a financial reckoning and transfer at the end of the acquisition.
On October 6, 2021, Li Lin said in a WeChat group: "Without Huobi, there would be Binance and OK. If everyone is disappointed because of this, I apologize."
