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Huobi founder Li Lin has sued Huobi Global in Hong Kong for using the Huobi trademark without proper permission. Lin has filed a lawsuit in the High Court of the Hong Kong Special Administrative Region.
According to the lawsuit, the exchange continued to use the Huobi trademark without obtaining consent from Li Lin’s company, X-Spot.
Huobi Founder Sues Exchange He Founded
Chinese crypto reporter posted details about the lawsuit on his Twitter handle, stating that the crypto firm had resumed using the “Huobi” trademark without permission from X-Spot. Lin’s company maintains exclusive rights to the trademark. The news of the lawsuit comes as the exchange attempts to increase its footprint in Hong Kong in the face of growing regulatory pressure on the crypto industry. The United States Securities and Exchange Commission has also clamped down on cryptocurrencies and crypto platforms, forcing exchanges to look for more friendly jurisdictions.
Colin Wu, a Chinese crypto reporter, published details about the lawsuit on Twitter, stating,
“Huobi founder Li Lin formally sued Huobi Global in Hong Kong for using its Chinese trademark ç«å¸ that was not allowed to continue to be used in the original acquisition contract. Huobi was acquired by Justin Sun for over $1 billion last year. Sun froze Li Lin’s brother’s account and accused him of dumping HT this year.”
Li vs Sun
The move to sue the exchange comes after Justin Sun, Huobi Global Advisor, moved to block Li Lin’s brother, Li Wei’s account and accused him of dumping Huobi Global’s native HT token. Sun had assured token holders at the time that the volume of HT tokens sold by Wei would be removed from the circulating supply, restoring the token’s original value. The move resulted in the token facing significant volatility. Following the blocking of the account, Huobi began using the “Huobi” trademark once again.
However, the complaint filed by Li Lin on the 21st of June, 2023, states that X-Spot had retained exclusive rights to the Huobi trademark.
“X-Spot Limited has retained exclusive rights to the ‘Huobi’ trademark, which Huobi Global Limited has been using without X-Spot’s authorization.”’
Apparently, when the original shareholders transferred their shares in Huobi Global to About Capital Management, they explicitly agreed to retain the “Huobi” trademark. According to the terms of the agreement, About Capital’s buyout vehicle would control a majority stake in Huobi Global once the transaction was complete. The sale of the exchange was part of a larger strategy to position the platform as an option for providing international investors with the best investment and trading services.
Apart from retaining trademark rights, shareholders also agreed that the rights would not be transferred to Huobi or the buyer. They added that the parties’ asset delivery and equity transfer agreement prohibited the purchaser from using the “Huobi” brand and trademark.
Huobi Global Counters
However, Huobi Global has countered the claims, arguing that the exchange maintains the right to use the trademark in a number of legal jurisdictions globally. According to the exchange’s interpretation of the agreement, it has the mandate to use the “Huobi” trademark freely. Huobi Global Limited is currently looking to expand its operations in Hong Kong. However, the exchange is not yet registered in the region. This is significant due to the threat posed to the proposed expansion plans by Li Lin’s lawsuit.
According to operational rules in Hong Kong and other regions, the right to use a trademark is subject to the regulations and laws in the region. As a result, a court will have to approve Huobi’s expansion plans. Meanwhile, the Huobi token is currently trading at $2.69, suggesting increased investor interest in the token despite the ongoing troubles. So far, there has been no official comment by Justin Sun or Huobi Global about the lawsuit.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.