Li Lin: The “$30 million funding hole” is essentially a loss of position caused by extreme market conditions when the exchange was operating margin trading business.

Odaily Planet Daily News In response to Sun Yuchen's statement that "Li Lin had a $30 million hole when he sold Huobi", Li Lin made the following response: 1. Different understandings of the calculation method of assets during the delivery process During the HTX delivery process in October 2022, the two parties had major differences in the calculation method of user assets. The specific situation is as follows: 1. At the time of delivery, our financial team independently eliminated negative asset users in accordance with industry practice and calculated the total assets of users accordingly. 2. If negative asset users are not eliminated, the calculated total assets of users will be lower than the actual total assets, resulting in insufficient tokens reserved at the time of delivery, affecting user redemption. 3. All accounts of the delivery process are fully archived and have been fully delivered to Sun Yuchen's team for independent audit and verification. Simply put, at the time of delivery, we have taken into account the situation of users' negative assets and reserved sufficient reserves. Mr. Sun Yuchen and I have had many communications on this matter, and Mr. Sun Yuchen has also clearly stated that he hopes to further check the accounts and clarify the facts. Therefore, this is not the so-called "concealment of transfer" or "fund hole", but because the delivery has been completed for two years, the core personnel and financial data have changed greatly, resulting in misunderstandings between the two parties on the calculation method of financial data at the time of delivery. 2. About the so-called "fund hole" 1. The "US$30 million fund hole" mentioned by Mr. Sun Yuchen is essentially a position-breaking caused by extreme market conditions when the exchange operates margin trading (leverage) business. 2. The usual practice in the industry is that the exchange will seek compensation from users as soon as possible. After a period of time when it is unable to recover, it will be recognized as an operating loss in finance, and the loss of position-breaking will be covered by business income. 3. This type of situation is relatively common in the industry and falls within the normal financial processing range, rather than a "fund gap" or "concealment of assets." Huobi has already used the company's income to do this part of the financial processing when the delivery was made. The assets delivered to the seller completely covered the user's assets, and there was no so-called "fund hole". 3. The delivery contract is subject to Hong Kong law and supports third-party legal arbitration 1. The asset delivery contract was signed and executed in Hong Kong and is subject to Hong Kong law. 2. If there is a dispute over the delivery result, we fully support fair rulings through the Hong Kong court or a third-party arbitration institution, and safeguard the legitimate rights and interests of all parties through legal means, rather than unilaterally using social media for unilateral trials. 4. Understand but oppose irresponsible remarks 1. Mr. Sun Yuchen, relying on his own strong media influence, unilaterally made remarks against me on a public platform when the facts were not clear and there were serious differences between the two parties. 2. This behavior seriously affects my business reputation, and may also mislead the market and investors and disrupt the normal operation of the industry. 3. I ask Mr. Sun Yuchen to immediately stop such behavior, return to the legal framework, and resolve commercial disputes through reasonable and legal channels. According to previous news, Sun Yuchen posted on X: People familiar with the situation know that Li Lin concealed the due diligence materials at the time (when selling Huobi) and created a $30 million hole internally. In the end, I discovered his manipulation. After being exposed, he cheated and refused to give me a penny. I lent it to the company to fill it.