In an official announcement made by the New Huo Technology, it has been confirmed that the unit has been granted a $14M loan by the former Huobi CEO Leon Li in order to cover client funds stuck on the FTX platform.
Stuck Assets Crisis
As part of the announcement, Huo discusses the difficulties associated with removing assets from FTX.
The board of directors of the company informs shareholders and potential investors that, as of the date of this announcement, that the company has deposited approximately $18.1 million in cryptocurrencies within the FTX exchange, of which approximately $13.2 million are customer assets and approximately $4.9 million are company assets.
There is a possibility that cryptocurrency assets can’t be withdrawn from FTX due to technical difficulties.
according to the press release, New Huo Technology has retained legal counsel and will work closely with FTX in an effort to recover the blocked funds. The holding company’s board of directors stated that the blocked funds at FTX are not having any impact on normal operations because the subsidiary is a separate legal entity from the holding company.
A warning was issued by the board of the possibility that if the funds are not recovered, then the Group’s financial performance could be materially and adversely affected.
I would like to inform you that Huo Technology has reached an agreement with Li Lin, the controlling shareholder of the Company and its non-executive director, pursuant to which Li has agreed to provide to the Group an additional unsecured facility up to a maximum amount of USD14 million.
It should be noted that the Shareholder’s facility does not bear any interest, and the Company will use the facility if necessary to cover client assets that may be subject to liability as a result of the incident.
In the Board’s opinion, the Shareholder Facility is operated on a normal commercial basis or on a reasonable basis, whichever is better for the Company.
There are no assets guaranteed by the Shareholder Facility, and the Shareholder Facility is conducted on normal commercial terms or better and is therefore entirely exempt from any shareholder approval, annual review or disclosure requirement on behalf of the shareholding.