Crypto exchange Huobi to cut 20% of its staff as ‘bear market’ strikes

Crypto exchange Huobi Global has revealed plans to cut hundreds of jobs amounting to about a fifth of its workforce in the wake of last year’s implosion of competitor FTX.

Huobi, which is one of the world’s most prominent digital asset companies and was founded in China, said the job cull came as a result of the “bear market” in crypto, adding that it would seek to maintain a “very lean team”.

Describing the job cuts as “personnel optimisation”, the company said the move was taken “to implement the brand strategy, optimise the structure [and] improve efficiency”.

Huobi is the third leading crypto player this week to announce a reduction in headcount after a painful 2022 in which several big firms collapsed and the value of tokens such as bitcoin tumbled. Silvergate, a crypto-focused US bank, said on Thursday it would shed about 40 per cent of its staff, while digital asset lender Genesis is cutting 30 per cent of its employees.

Justin Sun, Huobi Global’s advisory board member and a Chinese crypto entrepreneur, told the Financial Times that the job cuts would begin as early as next month and that “most” of the losses would happen in Asia. “We are gradually reducing our concentration in Asia although the region will remain an important market,” he said.

The announcement came at a time of rising concerns about trading platforms such as Huobi and industry leader Binance after the implosion late last year of Sam Bankman-Fried’s FTX empire.

Huobi’s in-house token called “HT” has dropped 10 per cent since Wednesday and by about 25 per cent over the past month, according to data provider CryptoCompare. Sun, also the founder of crypto blockchain Tron, said he was not concerned about the risks of a big jolt of withdrawals at Huobi, such as the one that ultimately pushed FTX over the edge, and said the exchange could handle clients cashing in tokens.

“We are not in financial trouble,” Sun said in a voice message, explaining that Huobi’s current performance “does not match” its operational objectives because of redundancy and market deterioration, adding that it was “mostly done” with the reduction plans. But he was unable to say whether there could be another round of job cuts. He also said that employees’ year-end bonuses had been reduced.

Sun added: “The [job cuts] have nothing to do with FTX.”

While Sun and Huobi’s statement did not confirm the number of employees affected, Sun told the FT in October that Huobi had about 1,600 staff members globally.

In his October interview with the FT before FTX’s collapse, Sun struck a more bullish tone as he said the company was planning to expand its workforce to roughly 2,000 people as it recently hired employees in Kenya and Nigeria. He also said the company was looking to move its headquarters from the Seychelles to the Caribbean.

Huobi is ranked as the world’s 16th largest crypto exchange based on daily trading volume with a 24-hour trading volume of about $340mn — about 4 per cent of Binance’s volume — according to CoinMarketCap. The platform was number two globally but slipped following China’s ban on crypto transactions in 2021, hammering its biggest market at the time.

FTX’s disgraced founder Bankman-Fried held talks with Sun in November as he looked to save the now-bankrupt platform by seeking a capital raise in an attempt to avoid the company’s collapse.