New Huo Technology said that it has $18.1 million worth of deposits stuck on the troubled cryptocurrency exchange FTX.
Investment holdings business New Huo Technology, formerly known as Huobi Global, claimed in a new filing with the Stock Exchange of Hong Kong on Monday that it has deposits trapped on the troubled cryptocurrency exchange FTX totaling $18.1 million. Client deposits made up $13.2 million, and assets from another company, Hbit, made up $4.9 million.
The founder of the company, Lin Li, has consented to New Huo Technology receiving a loan of up to $14 million in order to help save affected customers.
Chinese entrepreneur Lin Li, who founded Huobi Global, the world’s 20th-largest cryptocurrency exchange by trading volume, owns a majority stake in New Huo Technology. On November 13, the business said it had achieved a deal with Li for an unsecured, non-interest-bearing credit facility with a ceiling of $14 million to pay for clients’ liabilities. However, the business wrote:
“However, the Board anticipates that the financial performance of the Group might be materially and adversely affected in the event that the Incident is not resolved. The Board will discuss with the Group auditor to discuss the impact of the Incident on the Group’s financial position.”
Following an initial misunderstanding over the company’s previous name, Huobi Global, the revelation seemed to agitate investors on Twitter. The exchange provided the following clarification with regard to this:
“On Oct 8, Huobi’s controlling shareholder company transferred all the shares of Huobi Global it holds to the fund of About Capital. New Huo Tech are independent entities. All ops of Huobi are normal, & we will continue to provide customers with safe & reliable services.”
The revelation also came at a time of increased anxiety over the solvency problems facing exchanges in the wake of FTX’s bankruptcy. On November 13, Huobi and Gate.io both faced criticism for reportedly releasing reserve photos made with borrowed money.
