The Huobi crypto exchange logo displayed on a smartphone.
Nikolas Kokovlis | Nurphoto via Getty Images
Digital currency exchange Huobi reportedly said on Friday it plans to cut its global workforce by about 20%, in the latest round of layoffs to hit the beleaguered cryptocurrency industry.
The Seychelles-based company is one of the largest crypto exchanges in the world, processing approximately $370 million in trading volumes in a single day, according to data from CoinGecko.
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A company spokesperson told Reuters news agency that Huobi had a “planned layoff rate” of about 20%. Bloomberg and the Financial Times also reported on the layoff plans on Friday.
“With the current state of the bear market, there will be a very lean team going forward,” the Huobi spokesman told Reuters.
Justin Sun, who serves as a member of the company’s advisory board, described the move to Reuters as a “structural adjustment” that had not yet begun and is expected to be completed in the first quarter.
Huobi was not immediately available for comment when CNBC contacted him. Sun had not yet responded to a direct message on Twitter at the time of publication.
According to a Financial Times report, Huobi employed about 1,600 people worldwide in October.
Huobi’s native HT token at one point fell to $4.3355 on Friday, down more than 7% from the previous 24 hours, according to CoinMarketCap data.
After the collapse of FTX, crypto traders are looking for clues about what will be the next company to fall prey to the digital asset downturn.
Investor floods have piled up from centralized exchanges, with nearly 300,000 bitcoins moved from Nov. 6 to Dec. 7, according to the most recently available data from CryptoQuant.
Last month, Binance briefly paused withdrawals of the USDC stablecoin, raising concerns about its own ability to cover customer redemptions. USDC’s withdrawals have since resumed.
Between December 12 and 14, no less than $ 6 billion in digital tokens were withdrawn from the exchange.
In a so-called “proof of reserves” statement on Nov. 25, the world’s largest crypto exchange revealed it had a reserve ratio of 101%, indicating it had more assets than liabilities.
Doubts have been raised about the effectiveness of Proof of Reserves reports, which provide only a snapshot of the assets an exchange holds at any given time.
Consultancy Mazars, which had prepared a separate Proof of Reserves for Binance, stopped producing such documents for crypto companies on Dec. 16, citing “concerns about how these reports are being understood by the public”.
Huobi was acquired on October 7 by About Capital Management, a Hong Kong-based asset management company. Sun, who founded the Tron blockchain project, is an advisor to Huobi.
Huobi was originally founded in China, but was forced out of the country after an intense crackdown from Beijing against the crypto industry.
Today, Huobi only conducts consulting and research from China, while trading activities are conducted outside mainland China. The company has offices in Hong Kong, South Korea, Japan and the US