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HK Digital Asset Firm Raises US$36 Million

A Hong Kong-based public technology and digital asset trading firm recently announced that it has raised US$ 36 million in a share placement.

The placement came as the company’s digital asset business saw its revenue increase by 386% in the six months ending 30 June 2019 compared to the second half of 2018, according to a statement.

The business provides software-as-a-service, brokerage, exchange, and custody services for institutions and professional investors.

It was the first to apply for a license under the Hong Kong Securities and Futures Commission’s new framework for digital asset trading platforms and broker-dealers.

This allows regulated asset managers to more easily invest in the asset class and paves the way for security tokens to enter the Hong Kong market once licensees start operations.

The CEO of the group stated that digital asset market infrastructure is going through a rapid changing of the guard; licensing frameworks in every major jurisdiction are rewarding only the strongest and most professional operators, and these firms will continue to capture market share from unlicensed players.

The fundraise will then allow the company to invest more in technology and compliance, which will be essential as they compete in the current dynamic environment.

The group stated that the fundraise follows a wave of support for blockchain and digital assets from regulators across the globe.

Just yesterday, a new payments law came into force in Singapore to regulate various types of payments, including cryptocurrencies. Moreover, international crypto exchanges are now reportedly looking to apply for licenses.

Supporting Tech Opportunities in Hong Kong

Hong Kong continues to serve as an important technology and financial hub despite various economic setbacks. Figures from the Hong Kong Monetary Authority show that US$15.6 billion was removed from the city’s foreign exchange reserves from July to August, the largest decrease since 1997.

However, Hong Kong’s function as a bridge to China’s financial and technological development still remains an important factor amid uncertainty.

Hong Kong’s role, in particular in financial services, is to be a centre of gravity and play the role of connecting various nations through systems, people or technology.

Hong Kong is continuing to attract and retain leading overseas and Mainland companies, as well as entrepreneurs from around the globe who use Hong Kong as the base to set up leading-edge and innovative businesses.

The city saw a 9.9 per cent increase over the 2017 figure in the number of business operations in Hong Kong with parent companies overseas and in Mainland China.

The number of start-ups in Hong Kong was found to have risen by 42.8 per cent over the 2017 figure in a separate survey conducted by InvestHK.

Experts believe that Hong Kong’s enduring business advantages such as its strategic position in the region as well as its international status as a sophisticated business and financial city will continue to attract world-class investment.

Hong Kong’s start-up and FinTech ecosystem have rapidly and steeply risen in the last few years. The region’s renowned spirit of enterprise and its boundless energy create the perfect environment for starting a business.

This is supported by a strong network of incubators and accelerators, a pool of experienced angels and venture capitalists, a host of government-backed programmes and a welcoming community of start-ups, knit together by dozens of networking events, seminars and associations.

OpenGov Asia recently reported that Invest Hong Kong (InvestHK) assisted 487 overseas and Mainland companies to set up or expand in Hong Kong in 2019.

This number represents an all-time high and a year-on-year increase of 11.7 per cent, with the number of fintech companies and start-ups seeing the strongest growth. The total number of jobs thereby created (6,009) rose by 14.1 per cent over the previous year’s figure.

Looking forward to 2020, the agency will continue to strive to attract foreign companies, ranging from entrepreneur-led ventures to multinationals, to set up a presence in Hong Kong. This includes companies focusing on digital assets.

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