(Bloomberg) -- Crypto investment firm Hashkey Group plans to raise funds at a valuation above $1 billion, taking advantage of Hong Kong’s digital asset push to try and entice potential investors.
Hashkey, which operates one of the city’s only two licensed digital coin bourses, is in early-stage talks to raise $100 million to $200 million, according to people familiar with the matter. The deal is progressing but terms such as size and valuation could change because they aren’t finalized, the people said, asking not to be identified discussing private negotiations.
Representatives for Hashkey declined to comment.
Hashkey — which operates in areas from venture funding to asset management and trading — is one of several locally based firms hoping to expand their customer base in a rapidly liberalizing environment. Hong Kong’s government is pushing the development of the digital-asset sector as part of a wider effort to restore the city’s credentials as a cutting-edge financial center. The city is on course to allow retail trading of major coins on licensed exchanges such as Hashkey, to try and boost the local economy while reversing a talent outflow after years of Covid-related curbs.
Currently, Hashkey and BC Technology Group Co.’s OSL bourse are the only two with permits. Exchange leaders including OKX and Bitget have said they intend to apply for a license under Hong Kong’s new regulatory regime.
Chinese state-run banks have courted crypto businesses this year, one of several signs that Beijing backs the city’s overall vision. That’s partly because the government views the financial center as a testing ground for longer-term policy, even while banning most forms of crypto-activity on the mainland.
Hong Kong starts a new licensing regime for virtual-asset service providers on June 1 and plans to let retail investors trade major tokens like Bitcoin and Ether. That’s in contrast with the way regulators globally are grappling with how to handle the industry following last year’s market crash and a series of blowups, headlined by the spectacular bankruptcy of the FTX exchange.
Hong Kong Monetary Authority Chief Executive Officer Eddie Yue has said the city will maintain an exacting regulatory regime.
Hashkey started in 2018 as an early corporate investor in Ethereum, after founder and chairman Xiao Feng spun it off from Chinese cars-to-energy conglomerate Wanxiang Group. In April, Hashkey said its exchange will launch this quarter, with ZA Bank and Bank of Communications as settlement banks.
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