Digital asset financial services company HashKey Group is in talks with investors to raise between $100 million and $200 million in funding as the company looks to take advantage of Hong Kong’s emerging role as a crypto hub, according to a Bloomberg report today.

Although the details of the talks weren’t disclosed, the company is in early talks that could raise the valuation of the company above $1 billion according to the report, which cited people familiar with the matter.

HashKey provides end-to-end digital asset financial services to customers in Asia and investment solutions to institutions and professional investors. It operates one of the two licensed digital asset markets in Hong Kong alongside BC Technology Group Co. Among the company’s products are digital asset custody solutions and hosted blockchain infrastructure. The firm also announced plans to launch its own cryptocurrency trading platform, HashKey Pro, during the second quarter of 2023, with the Bank of Communications and ZA Bank providing settlement.

Hong Kong has been rapidly setting regulations around cryptocurrencies in order to set itself up as a crypto-friendly financial hub with clear frameworks for exchanges and businesses operating in the industry. HashKey is one of the first firms to gain approval from the Hong Kong Securities and Futures Commission to operate cryptocurrency financial services in the city.

These regulatory changes are in contrast to mainland China, which currently bans most cryptocurrency-related activities. The People’s Bank of China, the country’s central bank, declared services offering trading, order matching, token issuance and derivatives for cryptocurrencies illegal in 2021.

The new licensing framework in Hong Kong will allow digital asset services to begin trading major tokens such as bitcoin and Ethereum starting on June 1. This differs from the way that global regulators have approached cryptocurrencies. The recent crypto market turmoil has led to increased scrutiny of the industry and increasing regulations, particularly in the wake of the dramatic implosion and bankruptcy of the crypto exchange FTX Trading Ltd. and the collapse of the TerraUSD stablecoin in 2022.

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