Hong Kong has long been a financial powerhouse in Asia, and as the global Web3 revolution gains momentum, the city is reasserting its position as a key player in the digital asset ecosystem. Following the release of the Policy Statement on the Development of Virtual Assets in Hong Kong by the Financial Services and the Treasury Bureau on October 31, the government has clearly signaled its intent to foster innovation in blockchain, virtual assets, and decentralized technologies.
This policy declaration marks a pivotal moment—opening doors for institutional adoption, regulatory clarity, and international collaboration. While some view it as a cautious step rather than a full-scale embrace, the foundation is being laid for Hong Kong to reclaim its status as a leading hub for Web3 innovation in Asia.
But what does the current landscape look like? Which companies are shaping Hong Kong’s emerging Web3 future?
The State of Web3 in Hong Kong
Despite once hosting industry giants like BitMEX, FTX, and Crypto.com, many high-profile crypto firms have since relocated—often to Singapore. However, Hong Kong’s unique advantages—its robust legal system, free-flowing capital, deep financial infrastructure, and proximity to mainland China—make it a compelling choice for Web3 entrepreneurs with global ambitions.
Recent initiatives like the Global Fast Track 2022, organized by InvestHK, highlight this resurgence. Out of 118 innovative fintech startups selected globally, only 6.8% were based in or originated from Hong Kong—a small but growing cohort of homegrown Web3 talent.
These include accelerators, venture capital firms, digital asset platforms, and infrastructure builders—all contributing to a more resilient and diversified ecosystem.
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Key Web3 Sectors and Leading Players
Virtual Asset Trading & Management
The Securities and Futures Commission (SFC) remains the primary regulator for virtual asset activities in Hong Kong. Under its framework, digital assets are categorized into security tokens, NFTs, and virtual commodities (like Bitcoin), each subject to tailored regulatory oversight.
To legally operate a crypto exchange or fund management platform, companies must obtain one or more of the SFC’s 12 regulated activity licenses. The most relevant for Web3 businesses include:
- Type 1: Dealing in securities
- Type 4: Advising on securities
- Type 7: Providing automated trading services
- Type 9: Asset management
Three major players dominate this space:
OSL
As a subsidiary of BC Technology Group, OSL was the first company to receive SFC licenses for Type 1 and Type 7 activities. It offers institutional-grade services including secure trading, custody, brokerage, and compliance solutions. Recently, OSL also became the first digital asset broker registered to conduct Security Token Offerings (STOs) with professional investors.
HashKey
HashKey operates a full-stack ecosystem including HashKey Pro (exchange), HashKey Custody, and HashKey Capital (VC arm). Its regulated entities hold Type 1, 7, and 9 licenses, making it one of the most comprehensive digital asset platforms in Asia.
NH Asset
A subsidiary of Huobi Technology (now rebranded as “New Fire”), NH Asset holds Type 4 and Type 9 licenses and serves professional investors through virtual asset funds such as the New Fire Bitcoin Fund and Multi-Strategy Virtual Asset Fund. It is actively pursuing additional exchange-related licenses.
Other notable platforms like HKD.com operate under TCSP (Trust or Company Service Provider) licensing, offering both online and physical cryptocurrency trading experiences—including a nearly 10,000-square-foot retail exchange in Central.
Bond Tokenization: Pioneering Government-Led Innovation
One of the most promising developments is Hong Kong’s plan to issue tokenized green bonds—a move that could set a global precedent. The Monetary Authority (HKMA) has already completed Project Genesis with the BIS Innovation Hub, proving the technical feasibility of issuing tokenized bonds to retail investors.
This initiative aligns with broader goals of modernizing capital markets through DLT (Distributed Ledger Technology), improving settlement efficiency, reducing costs, and attracting new investor demographics.
Key players involved include:
OSL
Already at the forefront of STO execution, OSL is facilitating private security token issuance for major institutions including Animoca Brands and United Financial Group.
Knight Dragon
A real estate arm of billionaire Cheng Yu-tung’s family, Knight Dragon plans to issue 100,000 security tokens (KDB4) tied to profits from a London property development. Valued at approximately $172 million, this project exemplifies how traditional industries are embracing tokenization.
NFTs: From Collectibles to Financial Instruments
Hong Kong distinguishes between financial NFTs (regulated by SFC) and non-financial/collectible NFTs (largely unregulated). This nuanced approach allows creative expression while protecting investors.
Notable projects include:
The Heart Project
Launched by Edison Chen and artist Stefan Meier, this limited-edition NFT collection features 10,000 unique designs rooted in streetwear culture.
ZombieClub
Actor Shawn Yue’s NFT venture featuring 6,666 zombie-themed characters across nine distinct races—blending pop culture with blockchain ownership.
Artifact Labs
Spun off from South China Morning Post, Artifact Labs transforms historical media content into tradable NFTs. It also provides white-label solutions for museums, universities, and brands looking to digitize heritage assets.
Red Hare NFT
An analytics platform offering tools like Asia’s first NFT index, data dashboards, and incubation services—helping developers and investors navigate the NFT market with data-driven insights.
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Metaverse & GameFi: Building Immersive Digital Economies
Hong Kong is rapidly becoming a testing ground for metaverse applications. From education to entertainment, institutions are leveraging Web3 to build immersive digital experiences.
The Sandbox
Backed by Animoca Brands, The Sandbox has attracted major Hong Kong corporations:
- MTR Corporation is building a rail-themed virtual world.
- PCCW and HKT became the first CMT (Communications, Media & Technology) firms to join.
- Adrian Cheng, CEO of New World Development, invested $5 million into the platform.
STEPN
The popular "Move-to-Earn" app established its first non-Australian regional headquarters in Hong Kong after being invited by former Cyberport chair George Lam—signaling strong government support for health-tech Web3 innovations.
Crypto Venture Capital: Fueling Innovation
A vibrant VC scene is critical to ecosystem growth. Several Hong Kong-based funds are actively investing across DeFi, NFTs, infrastructure, and gaming:
Animoca Brands
With over 380 investments—including Axie Infinity, OpenSea, Dapper Labs, and Yield Guild Games—Animoca is one of Asia’s most influential Web3 investors. It also develops original games like The Sandbox and Crazy Kings.
Kenetic Capital
Focuses on early-stage blockchain projects with stakes in FTX (pre-collapse), Alchemy, Polkadot, and IoTeX.
Chiron
Manages a $50 million fund targeting DeFi and metaverse-related NFT ventures.
Frequently Asked Questions (FAQ)
Q: Is Hong Kong supportive of cryptocurrency businesses?
A: Yes. With the 2022 Policy Declaration and ongoing regulatory reforms, Hong Kong is actively encouraging licensed virtual asset service providers to establish operations—especially those serving institutional and professional investors.
Q: Can retail investors trade crypto in Hong Kong?
A: Under proposed rules, licensed exchanges may soon offer limited access to retail investors after public consultation by the SFC. Currently, most platforms serve only professional clients.
Q: How does Hong Kong differ from Singapore in Web3 regulation?
A: While Singapore takes a cautious stance toward retail exposure, Hong Kong is exploring regulated retail access. Additionally, Hong Kong emphasizes integration with traditional finance via tokenization and institutional adoption.
Q: What types of Web3 businesses are thriving in Hong Kong?
A: Digital asset exchanges (OSL, HashKey), NFT platforms (Artifact Labs), metaverse builders (The Sandbox), blockchain VCs (Animoca Brands), and tokenization pioneers (Knight Dragon) are among the most active sectors.
Q: Are there tax incentives for Web3 companies in Hong Kong?
A: While no specific crypto tax breaks exist yet, Hong Kong’s low corporate tax rate (16.5%), territorial taxation system, and strong IP protections make it attractive for fintech startups.
Q: How can a foreign Web3 startup enter Hong Kong?
A: Companies can apply for SFC licensing if offering regulated services. Alternatively, joining government-backed accelerators like Cyberport or participating in Global Fast Track can provide networking and regulatory guidance.
Final Thoughts
While challenges remain—including competition from Singapore and evolving compliance requirements—Hong Kong’s blend of financial sophistication, legal transparency, and strategic policy moves positions it uniquely for a Web3 comeback.
For founders building at the intersection of finance and technology, now is an ideal time to consider Hong Kong as a launchpad.
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