Hong Kong-based Virtual Asset Exchange HKbitEX Secures US$10M Series A2

HKbitEX will be using the funds to enhance its technology, bolster compliance capabilities, and expand its offerings in the Security Token Offering market.

Hong Kong-based virtual asset exchange HKbitEX has raised US$10 million in a Series A2 round, according to a statement today.

New investor Axion Global Investment led the round. Existing investors Draper Dragon Innovation Fund III and QBN Capital participated in the round, joined by new investors Lenovo Capital and Incubator Group, Lingfeng Capital Partners and Algo Capital Master Fund (Algorand), the statement said.

The company is a subsidiary holding of Edvance International Holdings and Hanwha Asset Management.

“We are excited to be leading this funding round, and continue supporting the innovative technology platform being built at HKbitEX,” CEO of Hanwha Asset Management, Yong Hyun Kim said in the statement.

“This is one of the first companies in Hong Kong applying for licensing to build an enterprise solution for the [Security Token Offering] market that will ultimately help power this already existing ecosystem. We’re excited to be a part of the growth of the company,” he also said.

The statement noted that the 2019-launched exchange was working on products for the Security Token Offering (STO) market. To this end, the Series A2 funding will enable the company to enhance its technology and compliance capabilities, as well as drive market growth, it said.

Hong Kong’s regulatory framework for virtual asset trading “in line” with HKbitEX’s vision

HKbitEX said in the statement that the new regulatory framework for virtual asset trading by Hong Kong’s Securities and Futures Commission (SFC) was “in line with the company’s vision.” The statement said that this could make assets such as real estate, IP rights, green financing and private equity funds, that were previously illiquid, available for a broader investor base.

Regulation for virtual asset platforms trading STOs or a mix of tokenized securities and non-security tokens is covered by a previous opt-in framework adopted in November last year.

It stipulated that Hong Kong-based centralized virtual asset trading platforms that offered at least one security token can opt to be licensed and regulated by the SFC. Only those platforms offering services to professional investors are eligible to apply for a license per the framework.

The SFC also announced a new proposal in November this year to bring non-security token offerings under the gamut of its regulation. The proposal, which is currently open for consultation, is subject to Hong Kong’s legislative process. If passed, it will co-exist with the previously announced regime.

HKbitEX is one of the first APAC organizations to apply for a virtual asset trading platform license from the SFC, the statement noted.

“As the industry grows and regulation comes into play our mission and hope is to continue fostering Hong Kong’s strength as a global financial hub, embracing a new asset class that could bring new investors, fund flow, and talent to the Greater Bay Area,” CEO of HKbitEX Gao Han said in the statement.

“We are grateful to our investors for their continued support and commitment to our vision, our offering is well-timed with the rapidly increasing acceptance and upcoming regulations regarding the digital asset market. There is a great opportunity for us to innovate with a massive new customer base,” Gao also said.

Chairman and Group CEO of Edvance International, Raymond Liu said in the statement, “HKbitEX’s comprehensive eco-system will vastly contribute to the revolutionary digital asset market.”

“Combining HKbitEX’s strong background in finance and digital asset exchange, and our deep understanding in technology, together we believe this great synergy will elevate the development pace of the eco-system and create more business opportunities,” he added.

Header image by Jude Beck on Unsplash

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