Aurora Mobile & VMS Group to invest in crypto
Earlier this month, CoinNess reported on a flurry of Asian companies who had announced plans to add crypto to their balance sheets. That trend continued this week with two Chinese companies announcing similar plans.
In a press release published on June 24, Aurora Mobile, a marketing technology firm based in Shenzhen, announced its intention to begin to invest in digital assets. The Nasdaq-listed company (JG) outlined that its Board of Directors had approved the investment of up to 20% of the firm’s cash and cash equivalents in various digital assets in a strategic initiative involving Aurora Mobile’s treasury management.
Gaining exposure to emerging asset class
It described the initiative as an example of the company’s “commitment to innovative treasury practices,” focusing on long-term value creation for Aurora Mobile’s shareholders.
The firm’s CEO, Weidong Luo, said that the initiative will enable the company to diversify its portfolio, “gaining exposure to an emerging asset class with low correlation to traditional markets.” Luo also asserted that the move would demonstrate that the firm is “aligning with the technological advancements reshaping global finance.”
Aurora Mobile indicated that it would look to purchase Bitcoin, Ethereum, Solana, Sui and other tokens.
China’s crypto trading ban
A trading ban on crypto was introduced in mainland China in 2021. With that, it’s unclear how Aurora Mobile will establish its crypto treasury. It may opt to do so through Singapore-based subsidiary EngageLab or through an affiliated corporate entity in Hong Kong.
No such ban applies in Hong Kong, where VMS Group, another company which has decided to invest in digital assets, is headquartered. VMS Group is a family office which provides investment solutions and advisory services, while specializing in alternative investments.
According to a report published by Bloomberg on June 23, the company, which has $4 billion worth of assets under management (AUM), intends to allocate up to $10 million to investment strategies run by a decentralized finance (DeFi)-focused hedge fund, Re7 Capital.
VMS Group managing partner Elton Cheung told Bloomberg that the investment decision was taken as part of an effort to diversify into more liquid investments. Cheung added:
“We thought this was the right time [to invest in digital assets] because of growing demand and because we see clearer legislative and government support from various jurisdictions, as well as large institutional support and endorsement.”
Potential partnerships
VMS Group executive Zhi Li, who has been tasked with leading digital asset investments for the company, said that the firm is examining potential partnerships with blockchain payments and infrastructure projects. Li stated that “there is very strong institutional and family interest in getting regulated digital asset exposure,” adding that VMS has “seen the younger generation of families wanting to do something different.”
Alongside these investments into cryptocurrencies, demand for crypto-related stocks in Hong Kong is also surging. Shares in publicly-listed licensed digital asset platforms in the Chinese autonomous territory surged by as much as 200% on June 25 as the market reacted positively to the city’s developing digital assets policy.
