Shares of Hong Kong’s biggest licensed cryptocurrency exchange began trading on Wednesday as the city pushes to become a global hub for the technology.
Financial Secretary Paul Chan was among those present at HashKey’s listing ceremony.
Shares in HashKey Group, which was established in 2018 and runs an exchange alongside other ventures, climbed as much as 6.6 percent in their Hong Kong market debut after an initial public offering (IPO) that raised US$206 million.
Its shares lost some gains later in the morning, falling slightly below the IPO price of HK$6.68.
Still, demand for the institutional investor tranche of HashKey’s IPO reached 5.5 times the amount of stock on offer, the company’s filings showed.
The retail tranche was nearly 394 times oversubscribed.
HashKey’s IPO, the first by a crypto company in Hong Kong, came as some of the world’s major cryptocurrencies have been on a roller-coaster ride in recent months after repeatedly hitting record highs earlier in the year.
Bitcoin, the world’s most popular cryptocurrency, plunged as much as 36 percent in about a month after reaching an all-time peak of more than US$126,000 in early October.
On Wednesday, Xiao Feng, HashKey’s chairman and chief executive, said he was confident in the long-term prospects of digital assets, despite the short-term volatility.
“My confidence is only growing stronger and I am more optimistic than 10 years ago because there’s more regulation and compliance guidelines for us to follow which will allow the industry to grow further,” Xiao said.
Hong Kong is looking at ways to use cryptocurrencies as mainstream investment tools.
The city launched a licensing system this year for stablecoins, a less volatile type of digital unit.
Beijing banned cryptocurrency trading in 2021 and mainland authorities have recently renewed their warnings about virtual assets.
Xiao said the measures taken by mainland regulators were needed to tackle pyramid schemes and fraud using stablecoins, but that had nothing to do with Hong Kong.
“Hong Kong continues to promote policies regarding digital assets and we have benefited from that,” he said.
“We should firmly adhere to ‘One Country’, but wisely take advantage of ‘Two Systems.'”
HashKey, which is loss-making, will focus on cash flow rather than profitability in the near future and keep investing as the industry grows, he said.
According to the company’s prospectus, it plans to invest the proceeds in technology infrastructure, market expansion and partnerships and operational and risk management.
Etelka Bogardi, a financial technology lawyer at Reed Smith, said the timing was good for HashKey given the “very buoyant IPO market”, but the city’s crypto-friendly policies had also played a role.
“Hong Kong in particular in the last 12, 18 months has really pushed ahead with a lot of regulations, clarifications, pushes by the administration to make it a more facilitative environment” for blockchain technology, she said. (Agencies)
