HashKey Pushes IPO Despite Deep Losses, Regulatory Headwinds

HashKey Holdings, Hong Kong's largest licensed crypto exchange operator, has advanced its initial public offering (IPO) plans after clearing the Hong Kong Stock Exchange's (HKEX) listing hearing on November 30, 2025. The milestone, confirmed in the company's Post Hearing Information Pack, positions the firm to proceed with prospectus registration and investor marketing as it seeks to raise capital for technology upgrades, product development, and overseas expansion. Sponsors include JPMorgan, Guotai Haitong, and Guotai Junan, with Bloomberg estimating the firm may target up to $500 million in funding.

Despite its regulatory progress, HashKey's financials reveal ongoing challenges. The exchange reported a net loss of HK$506.7 million in the first half of 2025, down from HK$772.6 million a year earlier. This reflects heavy investment in compliance and scalability amid a competitive, tightly regulated market. For 2024, HashKey processed HK$638.4 billion in trading volume, doubling from the prior year, but its low-fee strategy-under 0.1%-prioritized market share over profitability, contributing to a $151 million net loss. Offshore activity also declined sharply, with Bermuda-based trading volumes dropping from $23 billion in mid-2024 to $1.4 billion by mid-2025.

The firm's diversification into tokenization, staking, and Web3 events has yet to yield meaningful revenue. Tokenization income fell to $140,000 (HK$1.1 million) in H1 2025, down from $900,000 (HK$7 million) in 2024, while Web3 events generated $3 million in the first half of 2025, a fraction of its core trading revenue. HashKey's broader ecosystem includes asset management, custody, and its Ethereum Layer-2 network, HashKey Chain, which has onboarded $1.7 billion in tokenized real-world assets. However, these initiatives remain small compared to its dominance in Hong Kong's licensed market, where it holds a 75% share.

Regulatory pressures from mainland China further complicate the landscape. Hong Kong's crypto industry, while growing, faces scrutiny from Beijing, which has banned crypto trading and mining since 2021. Recent reports indicate Chinese tech giants like Ant Group and JD.com have suspended plans to issue stablecoins in Hong Kong due to regulatory concerns. Meanwhile, HashKey's expansion into Ireland and Bermuda underscores its push to diversify geographically.

The IPO's success will hinge on investor confidence in HashKey's ability to balance growth with profitability. With $1.657 billion in cash and $592 million in crypto assets as of August 2025, the firm has resources to sustain its expansion. However, its path forward remains uncertain, as both market dynamics and regulatory headwinds continue to evolve.