HKMA incentivizes tokenization in Hong Kong

HashKey Launches Wealth Management Service Amid High DemandHong Kong-based HashKey Group, a leading financial technology company in Asia, has launched Hashkey Wealth, a wealth management service in response to significant demand from investors looking for exposure to the digital assets market.©Pexels/Tima MiroshnichenkoPortfolio diversificationWith the increasing adoption of cryptocurrencies and digital assets, many investors are seeking ways to diversify their portfolios and gain exposure to this emerging asset class. HashKey’s wealth management service provides investors with access to a wide range of digital assets, including Bitcoin, Ethereum, and other cryptocurrencies, as well as alternative investments such as non-fungible tokens (NFTs) and decentralized finance (DeFi) projects.The wealth management program is designed to meet the needs of both institutional and individual investors. It offers a variety of investment strategies, ranging from passive to actively managed portfolios, with different risk profiles to suit investors’ preferences. The program also provides a range of services, including custody, trading, and portfolio rebalancing, to ensure that investors can manage their investments with ease.Established track recordHashKey has a strong track record in the digital asset market, having launched its own cryptocurrency exchange in 2018 and a blockchain accelerator program in 2019. The company has also established partnerships with leading players in the industry, such as Huobi, to expand its reach and provide investors with access to a wider range of investment opportunities.In a statement, HashKey Group CEO, Deng Chao, said, “We are excited to launch our wealth management service and provide investors with access to the emerging digital asset market. Our goal is to provide investors with a range of investment options and strategies to meet their needs, while also providing them with the tools and services they need to manage their investments effectively.”Growing interest in digital assetsThe launch of HashKey’s wealth management service comes at a time of increasing interest in digital assets from both institutional and individual investors. With the market for cryptocurrencies and other digital assets expected to continue to grow in the coming years, it is likely that demand for wealth management services in this space will also continue to increase.Additional servicesThe company also gained approval from Hong Kong’s Securities and Futures Commission (SFC) for a Type 9 asset management license which allows it to manage portfolios that are entirely invested in digital assets.Hashkey PRO, its regulated virtual asset exchange, is due to launch in Q2, 2023. In order to facilitate this, the firm has gained SFC approval for both a Type 1 license which covers dealing in securities and a Type 7 license which enables the provision of automated trading services.Overall, the launch of HashKey’s wealth management service and its virtual assets exchange is a positive development for the digital asset market, as it provides investors with a range of investment options and strategies to suit their needs. With the company’s strong track record in the industry and its commitment to providing investors with high-quality services and solutions, it is well-positioned to capitalize on the growing demand for digital asset investments.

South Korean financial regulators have decided, at least for the time being, to maintain the current policy requiring cryptocurrency exchanges to partner with only one bank, according to a report from the Seoul Economic Daily.Photo by POURIA 🦋 on UnsplashDominance and money laundering concernsA government official cited concerns that allowing multiple banking relationships could potentially strengthen market dominance by leading platforms and increase money laundering risks. Regulators plan to revisit the issue after monitoring new developments following upcoming regulations that will permit institutional participation in the crypto market. This decision runs counter to a recent proposal put forward by the People Power Party (PPP) ahead of the presidential election that seeks to eliminate the one-bank-per-exchange requirement. Bizwatch reported that while the crypto industry initially supported the removal of this restriction unanimously, opinions have recently diverged among market participants. Divided industryMajor exchanges offering Korean won-based trading are mostly against the potential policy change. Except for Upbit, the country's largest platform, competitors express concern that modifying the rules could weaken their existing banking relationships if more financial institutions choose to partner with the market leader. Conversely, crypto-only exchanges, which cannot offer Korean won trading services, generally favor eliminating banking restrictions. These platforms believe relaxed regulations could create more opportunities to establish banking partnerships. Under current rules, virtual asset service providers must secure real-name accounts from a local bank to offer Korean won trading, placing those without such accounts at a competitive disadvantage. Banks also want changeKorean commercial banks align with crypto-only exchanges in supporting the easing of banking regulations. Jung Jin-wan, CEO of key financial institution Woori Bank, recently called for allowing multiple banks to serve individual crypto exchanges. He argues that the current one-bank-per-exchange system not only undermines systemic stability but also limits customer choice. While an official from a crypto-to-fiat exchange acknowledged the need for eventual reform of the one-bank-per-exchange system to improve customer options and market development, they also pointed out that industry stakeholders hold different views depending on their position in the market. The official said that dominant platforms perceive minimal practical benefits from permitting multiple banking relationships. 

U.S. crypto fund targets Asian investors for new $800M growth equity fundDan Tapiero, the New York-based founder of 1RoundTable Partners and 10T Holdings, is on a mission to raise between $700 million and $800 million for his upcoming fourth fund, with a recent focus on Asian investment interest.A recent report by Deal Street Asia pointed out that Tapiero has turned his attention to the potential of inward Asian investment, not least through his recent one-week business trip to the region in early December.Photo by Towfiqu barbhuiya on UnsplashInvestment vehicles1RoundTable Partners was Tapiero’s original investment vehicle, positioning itself as a growth equity fund building a portfolio focused exclusively on growth-stage blockchain and crypto projects. 10T Holdings was established more recently, targeting mid to late stage digital asset ecosystem (DAE) firms as part of its equity fund. Earlier this year, 10T was reported by Bloomberg to have $1.2 billion under management while seeking another $200 million in new funding.10T Holdings has fully deployed its three previous funds, forming a portfolio of 24 active DAE companies, including Gemini, Animoca Brands, Yuga Labs and Deribit. Tapiero’s cautious approach to valuations has been rewarded. He turned down opportunities in FTX and Celsius Network at their peaks prior to both entities failing spectacularly in 2022.Crypto equity fund resilienceThe crypto industry faced challenges, including the collapse of FTX, leading to tighter regulations and reputational damage. Venture investments in the sector saw a decline, with statistics from Galaxy Digital Holdings indicating that Q3 2023’s venture investments were below $2 billion, the lowest since Q4 2020.Tapiero is undeterred and is actively raising his fourth growth equity fund, focusing on “digital asset ecosystem (DAE) companies.” This fund, managed under 1RoundTable Partners, will primarily invest in mature DAE companies with $40–50 million in annual revenue and a market valuation exceeding $400 million. Tapiero’s strategy of targeting lower-risk, growth-stage opportunities aligns with his hedge fund legacy.Asian investor focusTapiero is actively seeking new investors in Asia for Fund IV, targeting a first close in Q1 2024. His efforts are focused on addressing the lack of growth-stage capital, particularly in Asia, where confidence in digital assets has strengthened due to crypto-friendly regulations.The veteran macro investor, who founded Gold Bullion International in 2009 prior to turning his attention to the digital assets space, sees a window of opportunity in the secondary market. Having already invested about $660 million through 10T Holdings, he notes that investors may have only a “six-month window” to capture discounted opportunities.In an interview with Bloomberg earlier this month, Tapiero outlined his view that Q4, 2023 will be the crypto sector’s “best quarter since the bull market.” He added:“We think that the bear market finished in Q4 2022. We had a sideways move for a while and then in July [2023] things sparked off with Larry Fink’s [BlackRock CEO] comments.”As Tapiero navigates the crypto landscape with a strategic focus on growth and risk management, his approach appeals to traditional investors, including major pension funds. Fund IV represents a step toward contributing to the ongoing evolution of the digital asset ecosystem. It’s on that basis that the investment industry veteran is targeting Asian limited partnerships (LPs).