Opening remarks

Entrepreneurship in Web3, discussing every Wednesday!

(Entrepreneurship Web3.0) is an interview program initiated by Mankun Law Firm for Chinese Web3.0 entrepreneurs. Every Wednesday evening, we invite industry leaders, frontline institutions, and well-known entrepreneurs to share, hoping to promote the compliant development of China's Web3.0 industry through positive voices, rational discussions, and experience sharing.

The Web3 track is changing rapidly. How can Hong Kong seize the global high ground by leveraging policy advantages? In this episode (Entrepreneurship Web3.0), Mankun Law Firm’s lawyer Niu Xiaojing converses with Techub News CEO Alma on the theme of 'Opportunities and Challenges in Hong Kong's Web3 Industry,' providing exclusive insights into Hong Kong’s Web3 ecosystem.

From entering the industry in 2017 to building a Web3 media based in Hong Kong, Alma has traveled globally and interviewed numerous big shots. She has witnessed the industry's ups and downs, personally experienced the innovation bottlenecks and on-chain boom of the carnival, and sounded the alarm for compliance after 8 years of deep cultivation: with policy support, opportunities in Hong Kong are limitless! This episode discusses Techub News's ecological strategy, highlights and bottlenecks of the Hong Kong carnival, pitfalls of compliant entrepreneurship, and her faith in Bitcoin, filled with valuable insights!

(Audio transcription text records processed by AI may have omissions and errors.)

Welcome this episode's guest; please introduce yourself to everyone!

Alma: Good evening, everyone. I am Alma, and many friends who know me call me 'Mu Mu' because they find it more affectionate to call me by my Chinese name. I entered the Web3 industry in early 2017, and it has been about 8 years now. I founded Techub News at the beginning of 2023, which is invested in by two very senior investors in the industry.

Techub News is a Web3 technology media based in Hong Kong, primarily focusing on content in the Web3 field, striving to create differentiated content. Since I entered the industry in 2017, I have been deeply involved in Hong Kong.

At Techub News, we mainly do a few things:

1. In terms of content, we will interview many experts, scholars, and practitioners in the industry. For example, right after the Hong Kong government issued the virtual asset policy declaration at the end of October 2022, we promptly interviewed Chairman Chen of the Web3.0 Association, compliant exchanges like OSL, as well as professors and scholars from Hong Kong Polytechnic University and Hong Kong University of Science and Technology, along with many industry practitioners. Some are video interviews, while others are written interviews.

2. In terms of activities, we have a very close cooperation with Cyberport, the incubator endorsed by the Hong Kong government. Starting from March 4, 2023, we held our first event. At that time, my company had not yet been officially registered and named, but we had already begun hosting events. We have organized many project roadshows, such as Big Demo Day, basically one every month, and we have already held more than a dozen sessions with strong support from Cyberport. We have also held various industry discussions and summits of different scales in places like Science Park, Wanchai, and Causeway Bay. For online events, we have hosted hundreds, inviting the Hong Kong Secretary for Administration to interpret policies or inviting industry guests to share.

3. In terms of ecological construction, we hope to invite Web3 builders from around the world to come to Hong Kong and co-build the Web3 ecosystem there. Overall, Techub News is a Web3 media based in Hong Kong, focusing on Web3 content, and promoting Hong Kong to become a global Web3 center through content, events, and ecological construction.

Thank you to Mankun Law Firm and Lawyer Niu for the invitation!

Q1: Techub News closely followed the Hong Kong carnival; can you review the highlights and feelings of the event?

Alma: We began comprehensive interviews during the Consensus Hong Kong conference in February this year, covering participating projects and speakers, interacting online and offline with great effect. Because not every audience member or our readers can come to Hong Kong in person, everyone wants to feel it up close. So, by April's Web3 Carnival, we continued this connected column and live-streamed for three days, basically covering all exhibitors and communicating with them.

In general, the scale of this carnival was larger than last year, about 1.5 times the space, so people felt relatively comfortable in it. I did not see official attendance numbers, but from my observations during three days of interviews, the flow of people each day was quite good. Some friends might feel that there were fewer people than before, possibly because the space was larger, making it seem less crowded.

From a procedural perspective, this carnival's experience was better than in the past. OKX sponsored a self-service ticketing system and also launched NFT tickets, allowing the audience to pick up tickets a day in advance, unlike the previous 2049 conference where everyone had to line up for tickets in the morning. So overall, the experience has improved significantly compared to the past.

From the perspective of exhibitors, both the February and April conferences shared a common characteristic, mainly dominated by exchanges. During February's Consensus, there were larger exchanges like CoinW and Gate. The April carnival was similar, with large exchanges dominating, such as OKX, TON, and GMGN as major sponsors. I feel that the number of sponsors in April was fewer than last year; last year there seemed to be more major sponsors, while this year the most memorable ones are OKX, TON, and GMGN. Most of them focus on on-chain projects or decentralized projects, like Dex and on-chain ecosystems. From this perspective, we can see the trend of industry development. On one hand, there is compliance, such as Hong Kong's compliant licensed exchanges; on the other hand, there are on-chain projects with a clear wealth effect. For instance, OKX sponsored through the OKX Web3 wallet, and GMGN is also a rising star that emerged last year and is developing very quickly.

In terms of public chain projects, TON surprised me this time. As a major sponsor, TON's own booth was relatively small, with no excessive promotion; instead, they gave more space to their ecological projects. TON brought dozens of ecological projects covering different tracks. In communicating with these project parties, I felt that their business models are more grounded and pragmatic than before, each with its own business logic. In contrast, other public chain projects, such as Aptos, Polkadot, and Sui, had booths during Consensus, but their April booths were relatively small and less impactful.

Regarding innovative projects, I found that this carnival had relatively few particularly innovative new projects; most were familiar old projects with not many exciting innovations. This may also be a current state of the industry, as everyone is waiting for new narratives or breakthroughs.

Overall, the trend shows that most of the projects that can participate in exhibitions are related to trading, such as exchanges, trading tools, wallets, OTC, and PayFi. These projects have their own cash flow and can afford sponsorship fees, indicating that they are doing relatively well in the current market environment. In contrast, other types of projects, such as some early-stage innovation projects, are relatively rare.

Local Hong Kong institutions also performed brilliantly, such as Bosera Fund, ZhongAn Bank, and Shengli Securities, all of which participated. Bosera Fund and HashKey launched financial products, and Shengli Securities' physical delivery products are also very attractive. Their products have some innovations within a compliant framework, which is quite interesting.

In terms of guest lineup, this carnival can be said to be unprecedented. Vitalik attended, and Hong Kong government officials were also present, releasing a new roadmap for virtual assets. This shows the Hong Kong government's determination and support for Web3.

In general, the scale of the April carnival was larger, the guests were more heavyweight, and the process experience was better, but in terms of project innovation and ecological diversity, it did not reach a fully blooming level. The industry narrative currently lacks a bit, and innovation still needs further breakthroughs.

Niu Xiaojing: There are relatively few innovative projects, and the narrative is lacking. Next, let’s discuss the overall trends and bottlenecks in the industry.

Q2: Is the Web3 industry entering a bottleneck period? What challenges does it currently face?

Alma: This topic has been a constant discussion among industry friends. I believe the Web3 industry is indeed in a relatively bottleneck period, with depressed coin prices, exhausted narratives, and unsustainable hotspots. Last year, meme coins were very popular, especially when Trump issued coins, reaching a peak. Extreme phenomena, such as someone live-streaming suicide or homicide, indicate that this model is unsustainable. Now that coin prices are correcting, meme coins are sluggish, and the industry is seeking new paths.

The previous round of VC models—seeking institutional endorsement, packaging teams, writing white papers, and harvesting when listing—has failed. Valuations have been too high; for instance, a listing could be a market cap of 1 billion USD, and retail investors have no wealth fantasies. The fair launch and transparency of meme coins are attempts to challenge the old path, but the essence is still a casino model, lacking long-term value.

Another challenge is the lack of innovation. Many projects are old faces, lacking exciting new narratives. The industry needs new breakthroughs; for example, on-chain products may be the direction, but they are still in the exploration stage.

Niu Xiaojing: You mentioned that meme coins are unsustainable, VC models are ineffective, and narratives are exhausted, which indeed points out the pain points of the industry.

Alma: Although there are bottlenecks, the industry still has some highlights and trends worth noting. I believe there are two main trends for the future.

The first trend is compliance and centralization. The Web3 industry will increasingly become compliant, the threshold for entry will become higher, and related products will become richer. Asset tokenization, or RWA (Real World Assets), is a huge market. Hong Kong is becoming a center for virtual assets, as seen from policy support and the return of talent. When I entered the industry in 2017, the 94 policy allowed Binance to seize opportunities and siphon traffic from other exchanges. After CZ went overseas, I hadn’t seen him in Hong Kong for many years, usually meeting him in Taiwan or Singapore. But this time, many industry veterans have returned. Last year, I saw Wu Jihan in Hong Kong; he was working on a compliant crypto fund. This year, CZ, Bao Er Ye, Sun Yuchen, and Li Lin are all active in Hong Kong. Bao Er Ye mentioned in my interview that he plans to return to Hong Kong. The return of these big shots indicates that there are huge opportunities in compliance and RWA in Hong Kong. The Hong Kong government’s policy support is strong, and the global political and economic situation is also leading more Chinese to choose Hong Kong. For example, some family offices that previously chose Singapore are now also starting to return to Hong Kong. This is a trend of centralization and compliance.

The second trend is the vitality of on-chain projects. I believe the true vitality of the Web3 industry lies on-chain. The wealth effect in 2024 will mainly come from on-chain projects, such as the Bitcoin ecosystem, payment track PayFi (payment finance), and decentralized exchanges (Dex). In addition to the rise of Bitcoin, on-chain projects have also brought many opportunities. Centralized exchanges feel the pressure from on-chain projects and have begun to layout on-chain products. For example, OKX launched a Web3 wallet at the end of 2022. When I visited their office in Causeway Bay, they said the KPI they valued most was the number of registrations for the Web3 wallet. Binance is developing the BSC chain, and HashKey's focus in 2025 is the HashKey chain, planning to launch its own Dex.

The payment track is especially hot. Globally, there are about 600 million people holding crypto. In regions with unstable currencies, such as Turkey, people increasingly need to use crypto for consumption directly without withdrawing cash. For example, in Dubai, real estate agencies support crypto purchases, and the emergence of U-cards is part of future trends. I personally admire OKX's Xu Mingxing, who has strong foresight, having laid out the Web3 wallet as early as 2022. HashKey is also accelerating on-chain development. These are all highlights of the industry.

Niu Xiaojing: The compliance roadmap is becoming clearer, Chinese leading figures are returning to Hong Kong, and the rise of on-chain innovation and payment tracks indeed aligns with the industry's major trends.

Q4: How does the Hong Kong government position itself regarding Web3, and what is its policy support and regulatory environment like?

Alma: Since the Hong Kong government issued the virtual asset policy declaration at the end of October 2022, it has clearly stated its intention to build Hong Kong into a global Web3 center. When I entered the industry in 2017, the 94 policy was a key point. Before 94, I often traveled to the mainland, especially Beijing and Shanghai, where the crypto ecosystem was very mature, with strong miners, exchanges, mining machines, media, and communities. After 94, I returned to Hong Kong, where the regulatory environment was very loose, and the government took a tolerant attitude. Many well-known companies, such as FTX, BitMEX, and Tether, were born from Hong Kong. Major global exchanges also have a presence in Hong Kong. In 2018, we held a quantitative event for Huobi, and the data showed that Hong Kong's crypto exchanges ranked fifth globally; although not many, the user quality was high and investment scale was large.

Before the pandemic, the regulation in Hong Kong was lenient and tolerant. Around 2018, some teams began to try to create compliant licensed exchanges, but at that time the government policies were not as clear as they are now, and it was more about exploration and sandbox regulation. The application process for licenses was lengthy, causing many teams to run out of funding and give up.

The declaration at the end of October 2022 was a turning point. This time it was top-down innovation, and the speed of policy implementation was very fast. By the end of 2022, the futures ETF for Bitcoin and Ethereum was implemented. In 2023, the spot ETF was also launched, supporting physical subscriptions, which is a globally leading innovation. Currently, Hong Kong has 10 compliant licensed exchanges, such as OSL and HashKey. OSL was the first to obtain a license during the pandemic, and HashKey is now also open for retail trading.

Hong Kong's regulatory environment can be described as 'law can be depended upon to act.' Once legislation is in place, there are clear do's and don'ts. For example, compliant exchanges need to meet different requirements for retail and professional investors, and there are strict limits on the scope of token trading. This compliance brings government endorsement but also adds many shackles. I believe that most of Hong Kong's compliant exchanges are currently unprofitable, with insufficient trading depth, mainly relying on backers to burn money while laying out for the next 5 to 10 years.

In contrast, OTC business is currently the most profitable, especially the deposit and withdrawal services, which have clear profits. Traditional institutions are also accelerating their entry into Hong Kong, such as Bosera Fund and Shengli Securities, which are launching compliant products.

Q5: Compared to Singapore and Dubai, what are Hong Kong's advantages and disadvantages? What advice do you have for entrepreneurs?

Alma: First, let’s talk about Hong Kong's advantages:

First, as an international financial center, Hong Kong's financial system and legal framework are very complete, and it has a sufficient talent pool.

Second, Hong Kong is backed by the mainland, connecting to a market of 1.4 billion users. Not only are there many mainland users, but their quality is also high, with strong gambling tendencies and a preference for small coins, creating a significant wealth effect. Users in the Asia-Pacific region are more willing to engage in high-frequency trading than in other regions, which is also why exchanges value the Asia-Pacific market.

Third, the 'front store and back factory' model in the Greater Bay Area. Hong Kong is the front store, responsible for branding and compliance; Shenzhen is the back factory of the Greater Bay Area, reserving technical talent. Many exchanges, such as Binance and OKX, have their technical teams in Shenzhen. Techub News has also written an article observing that industry practitioners have been moving south from Beijing, Chengdu, Hangzhou, and Shanghai to gather in Shenzhen. Mankun Law Firm has also moved from Shanghai to Shenzhen, indicating that the collaborative effect in the Greater Bay Area is strong.

Fourth, Hong Kong is more livable for Chinese people. Hong Kong has Chinese culture, global cuisine, countryside parks, and world-leading education and healthcare, with an average life expectancy that is the highest in the world. Compared to Singapore's Southeast Asian culture and Dubai's non-Chinese environment, Hong Kong is more attractive to Chinese people.

In terms of disadvantages, the compliance threshold in Hong Kong is high, and exchanges are not profitable in the short term. The cost of living is also high, with housing prices and daily expenses being more expensive than in Singapore and Dubai. Moreover, Hong Kong did not catch up in the era of the internet and mobile internet, and the innovation of Web3 has been questioned as 'loud thunder but little rain.' However, this time, the top-down policy implementation has been swift, proving Hong Kong's determination.

Compared to Singapore and Dubai, Singapore has strong policy support, but the government is more assertive, and the culture is more Southeast Asian, making it less livable than Hong Kong. Dubai has open policies, but its legal system is not as complete as Hong Kong's, and the adaptability for Chinese people is low. Hong Kong's unique advantages are its backing from the mainland market, Chinese culture, and sound legal framework.

For mainland entrepreneurs, Hong Kong's Cyberport already has over 200 Web3 companies, many of which are Hong Kong companies registered by mainland teams. To obtain government subsidies, such as the nurturing plan, it may require having a local contact in Hong Kong within the team. Non-compliant exchanges cannot publicly promote in Hong Kong, and the risk of illegal activities is high; it is recommended to consult Mankun Law Firm to ensure compliance.

Niu Xiaojing: Hong Kong's efficient policies, sound legal system, and advantages of being backed by the mainland market indeed make it an ideal place for Web3 entrepreneurship. Friends in the live room mentioned some specific issues, such as RWA, paths and risks for mainland investors, and the legality of OTC; we will now ask Alma to answer.

Q6: What is the current development status of RWA and its representative projects?

Alma: Currently, RWA is still in the early exploration stage. For example, the case of Langxin Group shows that most projects are still in the validation of technical feasibility and have not yet issued in the primary or secondary markets. The funding sources mainly come from the project’s own funds or financing from acquaintances. To successfully develop RWA projects, strong product capability and fundraising ability are required. The core challenge is the infrastructure for stablecoins. Hong Kong is accelerating stablecoin legislation, and I believe it will soon be implemented. Once it is implemented, it will greatly promote the development of RWA.

Currently, there are not many representative projects for RWA. Langxin Group is a more typical case, attempting to put real-world assets on-chain, but it is still in the experimental stage. In the future, as the infrastructure for stablecoins improves, more projects will emerge.

Q7: What are the paths and risks for mainland investors to invest in Hong Kong?

Alma: Currently, compliant exchanges like HashKey only open to local Hong Kong and some overseas users, and mainland users cannot register or trade. However, mainland investors can use OTC services in Hong Kong for deposits and withdrawals. Transactions below 10 million to 12 million Hong Kong dollars usually do not require KYC and are mostly cash transactions. You can bring cash to OTC outlets for direct exchange.

For mainland friends who want to start a Web3 business in Hong Kong, Cyberport is a good starting point. There are already over 200 Web3 companies there, many of which are Hong Kong companies registered by mainland teams. Registering a Hong Kong company is straightforward; when applying to join Cyberport, you need to specify the project direction. If you want to apply for government subsidies, such as the nurturing plan, it’s best to have a local contact in the team for easier communication.

In terms of risks, if your project targets mainland users and offers non-compliant crypto services, it may involve illegal activities. Hong Kong is increasingly emphasizing compliance, and you need to clarify whether your user base is in Hong Kong or the mainland. Non-compliant exchanges publicly promoting in Hong Kong is illegal. Techub News published an article detailing the precautions for non-compliant exchanges in Hong Kong, which you can check on our app. I believe Mankun Law Firm is more professional in this area and can provide more specific guidance.

Q8: How is the legality of OTC kiosks in Hong Kong?

Alma: Regarding the legality of OTC kiosks, the regulation for OTC in Hong Kong has not fully landed yet; as of April, it was still in the second round of public consultation. Cash transactions below a certain amount do not require KYC, so they are currently legal. Whether tax is needed depends on the specific operational model of the outlet. It is recommended to consult a professional law firm, such as Mankun, for clearer answers.

Q9: As a media person, how do you filter valuable information in Web3?

Alma: Now, with information explosion and many channels, obtaining valuable information has become even more difficult. We have been thinking about how to filter content and adhere to media principles. I would like to share Techub News's approach and some lessons learned in 2023 and 2024.

When I entered the industry in 2017, a friend recommended a seemingly great token, but I ended up losing a lot of money. I realized that novices have a significant cognitive gap; many people only learn after paying tuition. The original intention of founding Techub News was to break the information asymmetry, help users make correct investment decisions, and access valuable information.

Our principle for filtering content is value-oriented and sustainable. Although meme coins have high traffic, we report very little on them because we know they are unsustainable. Our content team considers these to be bugs in the market, akin to short-term casinos. In April last year, the Bitcoin ecosystem was particularly hot; even my investors asked me for hot opportunities, fearing they would miss the trend. At that time, the hype was intense, and investors were very passive, with project parties asking high prices, and valuation negotiations were completely out of the question. But we remained calm and predicted that this wave of enthusiasm would not be sustainable. Now the Bitcoin ecosystem has cooled down, although some quality projects are still persisting.

We have also explicitly stated our position on Pi Network. The Pi community is large and attracts users through free airdrops, but we believe its operating model has signs of a pyramid scheme, so we publicly expressed our concerns. Recently, there was a case where an exchange offered loans to college students for futures trading, and we criticized this behavior along with other media because it targets inexperienced young people, effectively enticing them into gambling. Such high-risk, short-lived projects are detrimental to the long-term development of the industry.

Our content head once said something that touched me: if we chase every hot topic for traffic, we violate the original intention of the media. We hope to enhance users’ cognition, guide the industry forward, and protect retail investors. Therefore, our news is very selective, focusing on content with lasting value rather than drowning users in noise.

Advice for users: download the Techub News app to get our curated valuable information. Follow some well-known foreign media to broaden your horizons. Cultivate expert thinking: who is pushing behind the hotspots? Why is it public? Trading is counterintuitive; act less, be patient, and hoarding Bitcoin is often more effective than chasing trends.

Niu Xiaojing: Insisting on filtering sustainable content and protecting retail investors is admirable.

Q10: After 8 years in the industry, what personal insights or life experiences do you have?

Alma: After 8 years in the industry, the changes are rapid, filled with stories of grassroots rising to prominence. My greatest insight is 'those with virtue can carry great things.' In 2017, I was the first blockchain media in Hong Kong and interviewed countless early entrepreneurs and so-called big shots. Many people started from ordinary backgrounds, chose the right industry and timing, and accumulated great wealth, but very few can keep their wealth.

For example, I met Bao Er Ye several times in Hong Kong in 2018, and we had meals together. When Bitmain was preparing for its IPO, we discussed this topic on the same stage. I thought Bitmain had great prospects for its IPO, but Bao Er Ye asserted that it wouldn’t be listed and criticized Wu Jihan and others. I didn’t agree at the time, but later proved he was right. Now I think he has become wiser. He held early stakes in Binance and TRON, and Binance’s BNB is now worth 700 million USD. He feels he has too much wealth, exceeding his control, and proposed building a charitable fund in Malta, though it didn’t materialize. Recently, he and CZ plan to rebuild this fund in Abu Dhabi.

Those who can maintain their wealth often possess the qualities of retreating from danger and giving back to society. I have seen many early holders of several thousand bitcoins later lose most of their wealth due to poor decisions. Those who can settle down often understand when to exit and give back to society.

My core belief in this industry is to believe in Bitcoin, but aligning knowledge and action is difficult. I advise all listeners: hold Bitcoin with 10% of your disposable assets, don’t go all in, and you can surpass 90% of people in the market. Don’t chase short-term fluctuations; no one can consistently buy low and sell high. There’s a story that inspired me: I know a low-profile big shot who started hoarding Bitcoin in 2012 when the price was 200 RMB, and he hasn’t sold any. He predicted that Bitcoin would reach 20,000, 200,000, or even 2 million RMB based on Austrian economics logic. I asked him why he didn’t sell, and he said, 'Why sell the best asset for something as fleeting as a villa?' His belief influenced me. I suggest everyone: use funds that do not affect your life, take a small part to hoard Bitcoin, endure loneliness, and ignore fluctuations. Now, with the market being volatile, only those who hold for the long term can laugh last.

Niu Xiaojing: 'Hoarding Bitcoin, aligning knowledge and action' is truly heartfelt! I got involved with Bitcoin in 2017, and after many ups and downs, I found hoarding coins to be simpler. To sum up: firmly believe in the future of Web3, align knowledge and action, chase fewer hotspots, and build more long-term value. Thank you again for your sincere sharing!

Alma: Trading is counterintuitive! Hope everyone remembers: expert thinking, endure loneliness, don’t go all in, and use disposable assets to hoard Bitcoin. I look forward to more exchanges with everyone through Techub News!


Starting a business is not easy, but your story must be very cool!

Welcome to join Mankun's 'Entrepreneurship Web3 Column' to inject genuine and vibrant strength into China's Web3.



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Article author: Mankun Branding Department