Crypto firms’ interest in Hong Kong is skyrocketing with the launch of the $100 million fund

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(Kitco News) – Following recent reports of an increase in crypto-related activity in Hong Kong, which is taking place with the tacit approval of regulators in China, the special administrative region could potentially issue virtual asset trading licenses to at least eight cryptocurrency-related businesses by the end of this year.

This disclosure was made by Angelina Kwan, CEO of financial firm Stratford Finance and a former regulator of the Hong Kong Securities and Futures Commission (SFC), during a speech at the Wow Summit in Hong Kong on Wednesday, Forkast news reported.

Kwan has previously commented that Hong Kong regulators have received an influx of applications from crypto companies looking to set up in the region and urged firms to act quickly to avoid a backlog of applications when the new licensing regime takes effect in June.

Under the new regime, all virtual asset trading platforms that conduct business in Hong Kong or actively market to investors in the region will need to be licensed by the SFC. It also allows retail investors to access crypto trading services for certain tokens with major companies, such as Bitcoin (BTC) and Ether (ETH).

The agency opened a public comment period on the new regime in late February, and parties interested in sharing their views and expertise on the regulator’s requirements must submit their comments by Friday.

According to Christian Hui, the Secretary for Financial Services and the Ministry of Finance in Hong Kong, more than 80 virtual asset-related companies from China and foreign nations have already expressed interest in establishing a presence in Hong Kong as it looks set to become a leading cryptocurrency and Web3 hub.

This includes Seychelles-based cryptocurrency exchange OKX, which announced on Tuesday that it has set up an office in Hong Kong and will apply for virtual asset licenses to operate digital asset services in the city.

On Thursday, Bloomberg reported that a new Hong Kong-based fund — led by Ben Ng, a venture partner at Asian private equity firm SAIF Partners, and tech investor Curt Shi — plans to raise $100 million this year to invest in startups of digital assets. to help the city achieve its goal of becoming a regional fintech hub.

The fund, called ProDigital Future, has reportedly already secured at least $30 million in funding commitments and comes at a time when Hong Kong is looking to attract crypto companies and talent to help reverse the decline brought on by three years of Covid-related border controls. at the financial centre.

ProDigital Future will provide funding for early stage and development projects focusing on technology companies with ties to China making the transition to Web3. The fund has already invested in six digital asset projects, including Hong Kong-based metaverse company GigaSpace and Australia-based digital sports club One Future Football.

According to Shi, there is a high level of interest from Hong Kong residents and the fundraising process has been “relatively smooth” so far. There has also been involvement from Chinese family offices that have historically invested in Australia and Singapore.

“I think that Hong Kong will continue to have a certain degree of openness and flexibility,” he said. “While our portfolio and funds will embrace Hong Kong and its policies, we will continue to have a presence in Australia, Singapore, as well as in Europe and the US.”