Gaorong Backs HashKey's $1.5B Crypto Bet

Gaorong Ventures, a prominent Chinese venture capital firm, has invested $30 million in HashKey, a Hong Kong-based cryptocurrency exchange. This strategic investment positions HashKey at a pre-money valuation of approximately $1.5 billion, according to sources close to the matter. The deal, which has not been independently confirmed, follows HashKey's recent achievement of unicorn status in January 2024.

HashKey, which operates under licenses granted by the Securities and Futures Commission (SFC) of Hong Kong, has been expanding its services and regulatory compliance. The exchange received a license to deal in securities and offer automated trading services in November 2022 and later obtained a license to operate a virtual asset trading platform under the Anti-Money Laundering and Counter-terror Financing Ordinance (AMLO) in May 2024.

The investment by Gaorong Ventures comes amidst a broader recovery in venture capital investments in the cryptocurrency sector. According to PitchBook data, the final quarter of 2024 witnessed a slight uptick in venture capital funding compared to the preceding quarter, despite being $300 million lower than the same period in the previous year.

Hong Kong has been actively licensing cryptocurrency trading platforms, with PantherTrade and YAX receiving licenses on January 27. To date, 10 crypto exchanges have been registered under AMLO since 2020, allowing them to operate virtual asset trading platforms in Hong Kong. The Hong Kong SFC has also completed its first round of "on-site" reviews for crypto license applicants, focusing on client asset protection, KYC processes, and cybersecurity as part of its 2024-2026 strategic priorities.