Sinohope Technology, previously known as Huobi Technology, disclosed a significant setback, experiencing over a 40 percent loss in the first nine months of 2023. The company cited the immobilization of its funds within the collapsed crypto exchange FTX as a primary reason for this financial downturn.
In a filing with the Hong Kong stock exchange, Sinohope reported a staggering net loss of $37 million, marking a near 40 percent increase from its net loss during the same period in 2022, according to the South China Morning Post.
To mitigate financial challenges, Sinohope undertook significant measures, including substantial layoffs, aiming to curtail expenses amid the difficult financial landscape.
The company's revenue from its asset management division witnessed a sharp decline of 51.7 percent from the preceding year, underscoring the adverse impact of the situation.
Sinohope's subsidiary, Hbit Limited, found itself with $18.1 million worth of cryptocurrency entangled in the collapse of FTX.
Highlighting the scale of the company's restructuring, recent filings revealed a drastic reduction in the workforce. By September's end, Sinohope had only 87 employees, marking an astonishing reduction of nearly 90 percent from the 786 employees it had a year earlier.
The distress in the crypto industry was further accentuated by the downfall of FTX, once holding the position of the world's second-largest cryptocurrency exchange, which filed for bankruptcy in November 2022.
Adding to the turmoil, Sam Bankman-Fried, co-founder, and former CEO of FTX, faced severe legal ramifications. He was found guilty on all seven counts related to fraud and money laundering, including conspiracy to commit commodities and securities fraud, each carrying a maximum sentence of five years in prison.
(With Agency Inputs)
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