Crypto exchange HashKey shares end flat in volatile Hong Kong trading debut

By Kane Wu, Scott Murdoch and Donny Kwok

HONG KONG, Dec 17 (Reuters) – Cryptocurrency exchange HashKey Holdings Ltd made a flat debut in Hong Kong on Wednesday amid recent weakness in digital assets, but its management said it remains confident about the sector’s long-term prospects.

HashKey shares closed at HK$6.67, down 0.15% from the offer price of HK$6.68. The stock rose as much as 6.6% to HK$7.12 before sliding 8.4% to an intraday low of HK$6.12. That compared with a 0.9% gain in the benchmark Hang Seng Index.

That compared to a 0.9% gain in the benchmark Hang Seng Index.

HashKey, founded in 2018, offers a range of services including asset management, brokerage and tokenisation in addition to running the Asian financial hub’s largest licensed crypto exchange

Demand for the institutional investor tranche of HashKey’s IPO reached 5.5 times the amount of stock on offer, the company’s filings showed. The retail tranche was nearly 394 times oversubscribed.

HashKey’s IPO, the first by a crypto company in Hong Kong, came as some of the world’s major cryptocurrencies have been on a roller-coaster ride in recent months after repeatedly hitting record highs earlier in the year.

Bitcoin, the world’s most popular cryptocurrency, plunged as much as 36% in about a month after reaching an all-time peak of more than $126,000 in early October.

On Wednesday, Xiao Feng, HashKey’s chairman and chief executive, said he was confident in the long-term prospects of digital assets, despite the short-term volatility.

“My confidence is only growing stronger and I am more optimistic than 10 years ago because there’s more regulation and compliance guidelines for us to follow which will allow the industry to grow further,” Xiao said.

Beijing banned cryptocurrency trading in 2021 and authorities in China have recently renewed their warnings about virtual assets. But Hong Kong, which operates under a more free economic system, has embraced digital assets as it seeks to promote itself as a leading financial hub.

Xiao said the measures taken by mainland regulators were needed to tackle pyramid schemes and fraud using stablecoins, but that had nothing to do with Hong Kong.

“Hong Kong continues to promote policies regarding digital assets and we have benefited from that,” he said.

“We should firmly adhere to ‘one country’, but wisely take advantage of ‘two systems.'”

HashKey, which is loss-making, will focus on cash flow rather than profitability in the near future and keep investing as the industry grows, he said.

According to the company’s prospectus, it plans to invest the proceeds in technology infrastructure, market expansion and partnerships and operational and risk management.

Hong Kong Financial Secretary Paul Chan was present at HashKey’s listing ceremony.

A slew of companies are planning to launch their IPOs in Hong Kong in December as the city’s stock exchange is set to deliver its best year since 2021 with more than $34 billion raised from new listings so far, according to LSEG data.

($1 = 7.7779 Hong Kong dollars)

(Reporting by Donny Kwok, Kane Wu and Scott Murdoch; Editing by Saad Sayeed, Edwina Gibbs and Thomas Derpinghaus)