Crypto services firm linked to Huobi sees losses expand 40% with FTX funds still out of reach
Hong Kong-listed cryptocurrency firm Sinohope Technology Holdings Limited, formerly Huobi Technology, has seen losses expand in 2023, while it still has funds stuck in the bankrupt exchange FTX and amid plunging virtual asset prices that plagued the market for most of 2023.
Sinohope, which rebranded from New Huo Technology in September, reported a net loss of HK$288.7 million (US$37 million) for the first nine months of 2023, nearly 40 per cent greater than its net loss of HK$206.5 million in same period in 2022, the company said in a filing to the Hong Kong stock exchange last week.
The firm, known for its crypto investment services for institutions, said revenue from its asset management segment decreased 51.7 per cent from a year earlier, citing the drop in virtual asset prices as a reason. Revenue from crypto custodial, compliance and consultancy services fell 95.7 per cent, it said.
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The company also noted that it has not been able to withdraw funds it deposited in the now-bankrupt crypto exchange FTX. In a filing in November 2022, it said its wholly-owned subsidiary Hbit Limited had US$18.1 million worth of cryptocurrency at FTX, including US$13.2 million of client assets and US$4.9 million of company assets.
As crypto prices plummeted following the collapse of FTX in late 2022, Sinohope appears to have laid off a large number of employees to cut costs. By the end of September, it had 87 employees, according to the most recent filing – a nearly 90 per cent reduction from the 786 employees it had a year earlier.
HTX is one of the world’s top 20 centralised crypto exchanges by trading volume, and it is now known for its links with the Chinese crypto billionaire Justin Sun, who has become the public face of the company.
In November 2023, another US$258 million left the exchange after a security incident in which some US$30 million worth of cryptocurrencies were stolen, forcing HTX to temporarily suspend deposits and withdrawals.
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