In 2025, the sense of tearing in the Hong Kong crypto circle is becoming increasingly apparent.

"Every day, traditional financial institutions come to discuss Crypto business with us, and we are also trying to promote new businesses on platforms like YouTube and X, collaborating with influential KOLs and bloggers." A broker discussed the expansion of cryptocurrency business with enthusiasm and anticipation.

On the other side, an employee who had just joined a blockchain company but chose to leave soon expressed in a low tone: "I left; I couldn't stand this state-owned enterprise style."

In the same Hong Kong, the same cryptocurrency ecosystem, some feel the excitement and opportunities brought by the industry's economic growth; others feel the fatigue and disappointment brought about by institutional and cultural friction. Dramatic tearing is being played out every day.

On one hand, nearly all mainstream brokers in Hong Kong have already ventured into cryptocurrency business. Recent statistics show that over 40 brokers, more than 35 fund companies, and over 10 large banks and major accounting firms in Hong Kong have engaged in virtual asset business. For instance, Hong Kong's largest technology broker, Futu NiuNiu, has been providing clients with trading services for virtual assets like Bitcoin and Ethereum since August last year, and by the end of last year, its average daily trading volume had exceeded $35 million.

From brokers, funds, banks, auditing to insurance, mainstream financial institutions in Hong Kong are systematically and comprehensively incorporating cryptocurrencies into Hong Kong's financial system. This has made some financial practitioners who have crossed into the cryptocurrency industry feel a long-lost atmosphere of innovation and a kind of 'beauty of industry economic growth.'

However, on the other hand, some crypto natives who have joined compliant companies are experiencing a profound disillusionment—the decentralized utopia they once firmly believed in is constantly colliding with the realities of regulation, compliance, and financial logic. They want to maintain the 'style' and 'tone' of crypto natives while also wanting to share the pie in the compliant industry, which is becoming an unresolved contradiction for them.

Integration

The Hong Kong cryptocurrency industry is gradually giving birth to a new species in the constant tearing and integration of three main cultures.

The first culture is Crypto Native.

For example, early compliant cryptocurrency exchanges in Hong Kong like HashKey and OSL have attracted many crypto-native practitioners who have moved from companies like Huobi, Bybit, and Binance, which has kept these companies' cultural background relatively 'native', maintaining an open, flexible, and market-first atmosphere.

Similar to Digital Natives, Crypto Natives are well-versed in the on-chain world, naturally possessing sensitivity and creativity toward crypto culture, believing in decentralization and that technology knows no borders. However, it seems that Crypto Native practitioners are being diluted as more practitioners from internet finance and traditional finance enter this industry and quickly dominate within a compliance framework.

The second culture is internet financial culture.

Futu, Ant Group, Ant Financial, JD.com, etc., are typical representatives. They bring mature online operations and user growth experiences and are actively entering the Hong Kong cryptocurrency market. Some have already integrated well into Hong Kong's mainstream financial culture. For instance, Futu NiuNiu, as Hong Kong's largest internet broker, not only firmly occupies the online market but has also opened six physical stores in Hong Kong's most prosperous districts, showcasing a strong combination of internet financial genes and localization.

During a visit to physical stores in Hong Kong, a Futu employee enthusiastically helped the author open a US stock account and mentioned that she receives over a hundred customers weekly inquiring about US stocks, Hong Kong stocks, and cryptocurrency services. "Currently, Hong Kong accounts can handle cryptocurrency business, but users with mainland ID cards cannot," the employee stated.

It is reported that Futu Holdings' registered user count has exceeded 26.25 million, with the penetration rate of Futu NiuNiu among the adult population in Hong Kong exceeding 50%. The massive user base gives it a natural advantage in the Hong Kong cryptocurrency market. An insider revealed that Futu's cryptocurrency trading for Hong Kong users currently relies on the underlying trading system of HashKey Exchange, which represents a significant portion of HashKey Exchange's overall trading volume.

Aside from Futu, Ant Group and JD.com are also competing in the 'Hong Kong crypto circle'. However, unlike Futu's focus on cryptocurrency exchanges, Ant Group and JD.com are more focused on stablecoins and public chain tracks. Futu already has licenses, while it remains uncertain whether Ant and JD.com will obtain licenses.

The Hong Kong cryptocurrency industry is not a completely market-driven competition track but more like a place of resource competition, where obtaining a license is necessary to participate. An insider revealed that state-owned banks have a higher probability of obtaining the first batch of stablecoin licenses.

The third culture is Hong Kong's traditional financial culture. For example, HSBC, Bank of China Hong Kong, and Victory Securities, etc. These institutions have a longer historical presence in Hong Kong's financial industry, with some having foreign backgrounds, some with Chinese backgrounds, and others with local family backgrounds. They have also incorporated various cultures into Hong Kong's cryptocurrency industry.

Today, Hong Kong's cryptocurrency industry has developed a legitimate industrial chain covering hundreds of financial institutions—from brokers, funds, banks, auditing, to insurance companies, every link operates under a compliance framework.

From a regional and background perspective, this industrial chain includes foreign, Chinese, and local institutions; from a technological and institutional perspective, it gathers crypto-native, internet finance companies, and traditional financial institutions. Together, they form a diverse ecosystem in Hong Kong's cryptocurrency industry, supporting the robust development of the local crypto asset market.

The tearing and integration between different cultures are shaping this new industry.

The Hong Kong crypto circle can no longer be simply defined; it has become a unique and complex system encompassing over 100 financial institutions in Hong Kong.

Tearing: Human sorrow and joy do not connect.

The same Hong Kong, the same ecosystem, but everyone's perception of the Hong Kong crypto circle is completely different.

Some practitioners feel that the compliant Hong Kong crypto circle is releasing a beauty of economic growth.

For instance, some traditional financial practitioners who have just crossed into the crypto industry, companies that are applying for exchanges or stablecoin licenses, and internet finance giants that already hold a large number of users and can explore the market once they obtain licenses... they exhibit a strong momentum.

This is particularly evident in recruitment, as companies like Futu, JD.com, and Victory Securities have shown a strong desire for talent in the market, actively poaching at prices higher than market rates.

However, some practitioners feel that the Hong Kong crypto circle has entered a phase of market saturation and is in a downturn. Hong Kong's leading crypto companies have not found good methods to expand the pie, and can only helplessly enter a vicious cycle of competing for a smaller pie.

"Yes, I left; I couldn't stand this state-owned enterprise style," stated an employee from a public chain with a large institutional background who left shortly after joining.

"There is much less subjective initiative; everything must first consider regulation." A mid-level manager of a compliant crypto exchange responded when asked about the significant changes in work content after transitioning from the native cryptocurrency industry to the compliant cryptocurrency industry.

Some practitioners' sense of tearing originates from the significant cultural and institutional differences between Crypto Natives and the compliant circle.

The most recent incident that sparked considerable 'discontent' among Crypto Natives is the Hong Kong Stablecoin Bill, which will officially take effect on August 1, 2025. "I have never seen any stablecoin that requires KYC, nor have I ever seen any stablecoin that requires VPN restrictions. How can we innovate and develop like this?" complained one practitioner.

For practitioners immersed in crypto and blockchain culture, they are accustomed to a life driven by code and community, but now the compliant cryptocurrency industry in Hong Kong is entirely policy-driven, fundamentally forming two distinct ecosystems. However, many practitioners are still not prepared to switch perspectives and positions in these different ecosystems.

Hong Kong's distinctive cryptocurrency industry is experiencing growing pains after a forced integration led by policy. This pain involves not only the adjustment of policies and systems but also touches more deeply on the conflicts and harmonization between traditional financial culture, internet financial culture, and crypto-native culture.

Opportunity: Are some people quietly making a fortune?

At the beginning of a new system's birth, there often arise opportunities for early participants to 'quietly make a fortune'. They have taken the first share in the cross-industry endeavor.

For example, in the early days of stablecoins, Tether increased its trading volume by 100 times within a year, with annual trading volume exceeding $10 billion in 2017 and exceeding $1 trillion in 2020, while it is expected to exceed $10 trillion in 2024. Similarly, in the early days of Binance, its daily trading volume exceeded $100 million in the first two months, exceeded $1 billion in the fourth month, and exceeded $5 billion in the sixth month.

Of course, there are currently no companies experiencing such rapid business growth in Hong Kong, but that does not mean that no companies have taken the first wave of benefits during this process.

"Recently, traditional financial institutions have been coming to discuss Crypto business with us every day. We are also trying to promote new businesses on platforms like YouTube and X, and looking for influential KOLs and bloggers to collaborate with." A broker from a Hong Kong firm involved in cryptocurrency business expressed.

"As Hong Kong embraces cryptocurrency, hundreds of Web3 companies are entering Hong Kong, consulting policies, applying for various licenses, and exploring various businesses that require legal firm consultations, providing a substantial business demand for firms focused on cryptocurrency compliance," a crypto practitioner familiar with law firms stated.

"Every Web3 company wanting to develop long-term in Hong Kong will apply for a Hong Kong company bank account, generating a lot of transactions, which also brings considerable business to those banks that valued this segment early on, like ZhongAn Bank," a practitioner from a compliant exchange believes.

The opportunities in the Hong Kong cryptocurrency industry may not only lie in the traditional perceptions of exchanges, asset management, and stablecoin companies. Those institutions that provide 'water-seller' services in the development of the Hong Kong crypto industry are often also an important part of the beneficiaries.

Moreover, those companies that are truly quietly making a fortune are often only known to the public years later.

The Hong Kong crypto circle from different perspectives

"For crypto natives, the pace of innovation in compliant Hong Kong companies is too slow and carries a bureaucratic, even state-owned enterprise atmosphere; while for traditional financial institutions in Hong Kong, this year's innovation KPI may have far exceeded expectations," remarked a mid-level manager of a compliant crypto exchange.

Under different perspectives, the Hong Kong cryptocurrency industry presents sharply different appearances.

For practitioners who have grown up immersed in crypto and blockchain culture, they are accustomed to a rhythm driven by code and community. However, the current Hong Kong crypto industry is entirely policy-driven. There is no longer a wild atmosphere; the sharpness of innovation has been dulled, replaced by compliance, stability, and restraint. Many crypto natives feel that Hong Kong's compliance is 'castrating' the original creativity of the crypto circle, and this rejection reaction leaves them at a loss.

For those practitioners who are used to the safe and stable rhythm in traditional finance, the innovation pace of Hong Kong's crypto industry is not slow at all, and is developing in an orderly manner. Slow is fast; fast is slow.

Those practitioners caught in this historical tide can only adapt. Whether in love or resistance, the torrent of history will inevitably move forward.

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