A Delaware-based entity, Ceratosaurus Investors LLC, acquired the creditors’ claims in exchange for cash.
Leon Li, co-founder of the Huobi (HTX) exchange and a Hong Kong investment holdings business called Sinohope, would use its Hbit subsidiary to retrieve nearly 100% of the funds that were stranded on the now-defunct FTX cryptocurrency exchange.
Creditor claims from Hbit were sold to debt investment company Ceratosaurus Investors LLC for $19.5 million, according to a notice that became public on May 24. Sinohope had $18.1 million in FTX deposits before it collapsed in November 2022. The acquisition values the company’s assets at 108%.
The unreturned monies had a significant influence on Sinohope. Following a loss of $200 million ($25.61 million) at the same time in 2022, the business said on December 13, 2023, that it anticipates a loss of $280 million ($35.86 million) for the first nine months of the year.
Enterprise deposits of $86 million Hong Kong dollars ($11 million) that were frozen on the defunct cryptocurrency exchange FTX were a component of the loss. Customers of Sinohope who suffered losses when FTX went bankrupt had to rely on Leon Li’s $14 million personal line of credit, which he extended in order to keep the company running.
Huobi Global was ordered to stop using the “Huobi” trademark in Hong Kong on December 11, 2023, by X-Spot Global, another firm controlled by Leon Li. This was the equivalent of a Chinese trademark.
Registration of the Huobi trademark in Hong Kong occurred in 2019, as stated in court documents. About Capital Management, a business associated with Justin Sun, a prominent figure in the Chinese blockchain industry, acquired Huobi Global from co-founders Leon Li and Du Jun in September 2022. But before the purchase, Leon Li’s X-Spot Global had already become the owner of the trademark for the Huobi brand in Chinese. Last September, Huobi underwent a rebranding to become HTX.
The claims of FTX creditors, many of whom hold cryptocurrency as collateral, have increased in value due to the meteoric surge in cryptocurrency values seen by the market during the current bull run. Recovery estimates for FTX’s claims are now between 129% and 143%.
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