Huobi Loses User Money In FTX Bankruptcy: Why Were Millions On Another Exchange?

New Huo Technology Holdings Limited — the parent company of major crypto exchange Huobi — announced that it lost $18.1 million that was locked on FTX at the time of its bankruptcy.

What Happened: New Huo Tech also announced earlier Monday that of the $18.1 million, $13.2 million was in customer assets and $4.9 million was in corporate assets. This caused the community to wonder why well over $10 million dollars of customer assets were kept on a competing exchange instead of being kept as safe as possible in-house.

Read Also: FTX, FTX US, Alameda Research File For Bankruptcy: Cryptocurrencies Plummet

Crypto influencer Cobie asked his 777,000 Twitter followers "what could be a legitimate reason that Huobi customer assets would be stored custodially at FTX?" He said he "can think of lots of illegitimate reasons but struggling on any good ones."

Benzinga has contacted New Huo Technology for comment on the holding of user funds on a competing platform.

The Hong Kong regulatory filing by New Huo Technology also reveals "the board anticipates that the financial performance of the group might be materially and adversely affected in the event that the incident is not resolved," with the incident being the impossibility of withdrawing crypto from FTX.

The firm's controlling shareholder and non-executive director Li Lin provided an unsecured loan of $14 million to ensure the firm continues operations as usual, the filing said. 

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