In a landmark case that has caught the attention of the global cryptocurrency community, X-Spot Global Limited, led by Leon Li, co-founder of the prominent Huobi Global exchange (now HTX), has emerged victorious in a high-stakes legal tussle over the use of the “Huobi” trademark in Hong Kong. This development marks a significant shift in the trademark rights landscape, highlighting the intricate legal battles within the burgeoning crypto industry.
The Court’s Decision and Its Implications
The ruling, handed down by the Hong Kong High Court, categorically bars HTX exchange from using the “Huobi” trademark, along with its Chinese equivalent “火幣” and the business name “火必.” The court found these names to be “confusingly similar” to the English trademark registered in Hong Kong.
Presiding Judge Mimmie Chan J’s decision was unequivocal, noting the absence of a defense against the trademark infringement claim brought by X-Spot Global Limited. This decision underscores the critical importance of trademark rights, especially in an industry as rapidly evolving and competitive as cryptocurrency.
This legal victory for X-Spot Global comes against a backdrop of intricate corporate maneuvers. The Huobi trademark, registered in 2019, became a point of contention following Huobi Global’s sale in September 2022. Co-founders Leon Li and Du Jun sold the company to About Capital Management, an entity associated with Chinese blockchain figure Justin Sun.
Prior to this sale, rights to the Huobi trademark were transferred to Leon’s X-Spot Global Limited – a move that was not disputed by either party. This transfer set the stage for the subsequent legal battle when X-Spot sued Huobi Global in July 2023 for trademark infringement, a claim Huobi Global initially countered by citing its trademark rights in multiple jurisdictions.
A Twist in the Tale: Allegations and Counter-Allegations
The case took a dramatic turn with public allegations made by Justin Sun against Wei Li, Leon Li’s brother, in May 2023. Sun’s claims, posted on Twitter, accused Wei of acquiring millions of Huobi Tokens through questionable means and subsequently selling them, adversely impacting the company’s financial stability.
Leon Li’s public response to these allegations was a bold commitment to pay ten times the amount of any illicitly obtained tokens, should the allegations prove true – a move underscoring the seriousness with which he approached these claims.
In essence, the resolution of the trademark dispute in favor of X-Spot Global Limited marks a significant moment in the cryptocurrency world. It not only highlights the complexities of intellectual property rights in the fast-paced digital asset industry but also sheds light on the intricate and often murky world of corporate governance in crypto businesses.
