Running into Web3, Hong Kong brokers are "rushing in"
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Running into Web3, Hong Kong brokers are "rushing in"
Futu's entry this time means that all major Hong Kong brokers have now entered Web3.
Navigating Web3 tides with focused insightsBy Wu Tianyi
On August 1, according to Ming Pao, Futu Hong Kong has officially launched its virtual currency trading service regulated by the Securities and Futures Commission (SFC) of Hong Kong. The service includes four spot trading pairs involving BTC, ETH, USD, and HKD, allowing users to directly purchase cryptocurrencies using Hong Kong dollars and US dollars at real-time exchange rates.
According to information from its official website, Futu currently holds SFC Types 1 and 7 licenses, while established brokers such as AID Partners, Victory Securities, and Tiger Brokers hold only Type 1 licenses. Since June 1, 2023, firms providing virtual asset trading services in Hong Kong must also obtain an SFC-issued "VASP license." According to the SFC’s official website, these brokers’ VASP license applications are still pending. Applications from Futu, Tiger Brokers, and others are currently in a “deemed licensed” status.
DeThings reporters observed that these brokers primarily expand their operations through partnerships with compliant exchanges. Previously, at the first HashKey New Horizon Forum in June, Livio Weng, CEO of HashKey Exchange—the licensed virtual asset exchange in Hong Kong—revealed that they had already partnered with Futu on virtual asset trading, integrating technical systems so that once Futu's Type 1 license upgrade is approved, it can offer BTC and ETH trading services to clients.
Today, HashKey Exchange is not only Hong Kong’s largest licensed virtual asset exchange but also its leading omnibus service provider.
With the highest trading volume and best liquidity among licensed platforms in Hong Kong, nearly all major local brokers now access HashKey Exchange to provide trading services to their customers. According to a HashKey Exchange announcement, weekly trading volume for its omnibus brokerage business has surpassed HK$100 million—a remarkable achievement for a newly launched service.
When brokers enter the crypto trading space, their scope of operations differs from traditional brokerage activities. Under Hong Kong's Securities and Futures Ordinance and laws such as the People's Republic of China Securities Law, brokers are defined as legal entities offering investors securities trading services. They may accept client orders, execute trades on behalf of clients for commissions, or conduct proprietary trading under their own names. However, brokers are prohibited from accepting deposits, extending loans, or lending securities. Therefore, prior to obtaining VASP licenses, these brokers may need to offer virtual asset services via partnerships.
Futu Securities is the largest technology-driven broker in Hong Kong, with registered users accounting for approximately one-third of Hong Kong’s adult population. Its user asset base reaches HK$485.6 billion, and its total transaction value reached HK$4.2566 trillion in 2023. Other brokers similar to Futu include Tiger Brokers and Interactive Brokers—U.S.-backed brokers operating in Hong Kong—as well as locally backed firms like Victory Securities and Fuqiang Securities, along with more low-key Chinese mainland–backed brokers.
Futu’s entry signifies that all top-tier Hong Kong brokers have now entered Web3.
In May, Victory Securities stated it is applying for a Hong Kong virtual asset exchange license, with plans to launch its security token offering (STO) business by year-end at the earliest. In June, Tiger Brokers (Hong Kong) announced it had officially launched virtual asset trading services for retail investors in Hong Kong. In July, Eddid Financial Group announced it would soon roll out Bitcoin and Ethereum trading features via its smart trading app Eddid ONE.
These moves appear somewhat rushed, driven by multiple factors. First, since the approval of Bitcoin ETFs in January and the fourth Bitcoin halving in April, Bitcoin surged to $74,000. Over recent months, however, prices have fluctuated significantly, prompting frequent market speculation that this bull run may be halfway through—or already peaking. To avoid missing out on this cycle, brokers are accelerating their rollout of virtual asset trading services.
Second, prolonged weakness in the Hong Kong stock market has added pressure. Data shows the Hang Seng Index fell from over 30,000 points three years ago to a low of 14,863, recovering only to around 17,000 today. Trading volumes in Hong Kong have frequently remained below HK$100 billion per day, with around 1,000 stocks recording less than HK$10,000 in daily turnover and over 700 seeing zero trading activity. Additionally, 19 companies were delisted from the Hong Kong stock exchange in the first half of this year, including eight via privatization deals totaling $3.8 billion.
Amid this “cold spell” in Hong Kong’s equity market and rising delistings, turning to cryptocurrencies as a new investment option could serve as a strong stimulus for Hong Kong’s financial sector. This shift represents a gateway connecting millions of Web2 users to virtual assets.
According to the latest survey by Hong Kong’s Investor and Financial Education Council (IFEC), 96% of retail investors had invested in stocks over the past year, 24% in funds, and 18% in bonds. Among them, 8% invested in virtual assets or related products—an upward trend compared to 1% in 2019 and 6% in 2021.
Hong Kong currently has about 4 million stock investors. Futu Securities noted, based on its industry research, that over 40% of investors who have never traded virtual assets expressed interest in doing so via the Futu NiuNiu platform, while nearly 75.6% of experienced investors support the launch of virtual asset trading services on Futu.
Last August, HashKey Group COO Owen Weng said they were collaborating with about five local Hong Kong brokers to establish access points linked to HashKey’s cryptocurrency trading services. He said this collaboration could bring “tens of millions of users who currently trade Hong Kong stocks on these platforms” directly into crypto trading.
Additionally, Hong Kong has long been criticized for high compliance costs, raising concerns about profitability for service providers. However, according to Wen Wei Po, Victory Securities revealed that revenue from its virtual asset-related business could account for up to one-quarter or even one-third of its total income. Thanks to its early mover advantage, the firm has largely recouped its investment in virtual asset operations and is now profitable.
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