Author: BlockTempo
In the competition among global cryptocurrency exchanges, 'compliance' has gradually become a dividing line. HashKey Group is redefining industry rules through a series of global layouts. The media will hold the HashKey Gala Day in Taipei, where we had an exclusive interview with Board Director Tim Xing, allowing us to understand HashKey Global's clear vision and current steps. Tim shared how the team is breaking the deadlock with compliance strategies and outlined the future blueprint.
To help readers understand more quickly, Tim first introduced himself as a 'veteran' in the crypto industry born in the 90s, with over seven years of close involvement with exchanges, including participation in the operational work of Huobi Exchange, where the team launched coin-to-coin contracts and OTC products, propelling Huobi to the global No.1. After the tightening of policies in China in 2021, Tim saw richer opportunities overseas and later joined Bybit, where with the support of the Founders, he proudly built the fastest-growing spot team at Bybit.
Why did Tim join HashKey Global? He expressed that during his past work experiences, he deeply realized the future potential of the compliant market, which serves as the entry point for the traditional public, and the business expansion of compliant exchanges is unstoppable.
"Exchanges can be divided into three tracks: one is non-compliant, one is compliant licensed, and the last is DEX. In the future, the market share of compliant exchanges will definitely exceed 50%." Tim stated, further indicating that as crypto finance steps into the traditional market, finding the fastest-growing exchange track is understood within the industry to be compliant exchanges.
Based in Hong Kong: From 'local compliance' to 'global connection'
As a licensed exchange in Hong Kong, HashKey's Hong Kong site has been operating steadily for over a year. Tim emphasized, "The success of the Hong Kong site is due to the comprehensive regulation of the SFC, which not only protects local investors but also provides us with a unique market positioning."
Conservative compliance regulation brings special benefits. One of HashKey's core advantages in Hong Kong is its 'very smooth' fiat banking channel, where users do not have to worry about funds being frozen or undergoing lengthy reviews. Funds can be transferred from banks directly into HashKey's account, allowing for seamless entry of funds, even connecting with brokerage firms like Futu Securities, Victory Securities, and Tiger Brokers, enabling the same funds to be used for trading stocks or crypto.
But Tim clearly knows that relying solely on the Hong Kong market is not enough. "Our international site went live in April 2023 and obtained a Bermuda license, which is our first step into the global market." HashKey Global, through its complete digital asset license in Bermuda, provides a global offshore spot market and some regional user contract trading services, and plans to gradually acquire licenses in the Middle East VARA, Europe MiCA, etc., forming a layout of 'global structure, local compliance.'
HashKey Global's international site plan aims to break the regional site limitations of traditional offshore exchanges, having only one international site without regional sub-sites! Users can enjoy the advantages of global liquidity sharing on a single platform. 'For example, a European user entering the spot market can transact with an Asian client; the funding channel is the same. As long as it’s within compliant regions’ fiat banking channels, funds can be deposited in euros but withdrawn through Asian banking channels. This kind of liquidity integration is the future direction.'
Tim specifically pointed out that HashKey Global is looking at the long-term future, with licenses in the United States, Europe MICA, and extending to multiple countries, including the potential licensing system in Taiwan. The compliance across various regions equates to opening up fiat banking channels for funds, along with 100% offshore licenses to provide services to second or third world countries, ultimately targeting the largest market comprising both institutions and retail investors.
High costs drive long-term value: Build a compliant foundation.
Tim did not shy away from discussing the challenges and costs of compliant exchanges during the interview. "The operating costs of compliant exchanges are comparable to traditional banks, especially in risk control and anti-money laundering aspects. We are currently applying for the Middle East VARA and European MiCA licenses, and risk control standards are a major challenge." He cited these high-cost sources, indicating that HashKey has partnered with multiple insurance companies to provide insurance for user assets. "If our users suffer asset losses due to exchange issues, they will be compensated by the insurance company, not our internal insurance fund. This not only meets regulatory requirements but also differentiates us from other exchanges."
Tim recalled with a smile that since crypto assets are not covered by traditional insurance companies, HashKey Global had to negotiate with several insurance companies starting from a 'pilot' collaboration. Other costs also include customer KYC, biometric identification, and even requiring each token listed to ensure that the cash flow in and out on each blockchain complies with anti-money laundering requirements, which is an extremely costly process.
"I am a bit excited because we have talked to many on-chain security companies, and in the end, the on-chain KYT/AML collaboration partner is Beosin. We discussed for a long time, and ultimately agreed that this is a necessary piece of business in the compliant market. Beosin has entered this field and will provide on-chain KYT services for other exchange clients in the future, which means we have done something to promote the industry, and that makes me very happy."
Pushing some, then pushing some more, over time, these will become the compliant footsteps. Tim returned to a serious tone, stating that compliance is essentially legislators examining public needs. If practitioners can create traditional financial value in crypto finance and achieve a proper level of seriousness, compliance means doing it according to the ecology built by the practitioners. Compliance simplifies complexity.
Expanding boundaries: Tokenization of real-world assets (RWA) and new application scenarios.
As the new year approaches, Tim also previewed new products to look forward to, with the tokenization of real-world assets (RWA) being regarded as the next growth point. Tim revealed that HashKey plans to launch on-chain RWA products based on Ethereum L2 HashKey Chain soon, further expanding market boundaries. 'RWA brings traditional financial assets into the blockchain; this is a cross-border integration process that not only attracts insiders but also external investors.' The plan aims to push crypto financial products to external clients, which is precisely HashKey's forte.
In addition, HashKey Global is also exploring the possibility of a compliant fundraising channel. Tim pointed out that as regulatory policies in places like the United States become clearer, HashKey is planning a compliant fundraising channel. "This not only helps quality projects obtain funding but also provides investors with a safe way to participate; the previous ICOs have now taken on a compliant form."
Occupying the globe, becoming the Coinbase of the East.
Finally, it was inevitable to ask about HashKey Global's long, medium, and short-term goals for the next 10 years, 3 years, and 1 year. Is it growth in trading volume? Is it growth in user numbers?
Tim paused briefly before answering, "We are still in the business growth phase. He explained that HashKey's Hong Kong site has experienced regulatory clarification, and being formally licensed and regulated is equivalent to a mature exchange; however, HashKey Global, as an international site, is still in its early stages, at the first step of going online, providing complete offshore services to the world, with spot and contract markets, and tokens listed freely."
The second phase is the global fiat banking channel; the third phase involves obtaining complete licenses in more key cryptocurrency countries. Tim candidly said, "We are still on this path; currently, the international site is focused on perfecting functions, enriching product offerings, and enhancing the experience for early users."
What will the final image of HashKey Global look like?
Tim quickly stated, "We hope to be the Coinbase of the East."
In his view, this signifies three core attributes of crypto enterprises: occupying a leading position in the compliant market, having international influence within the industry, and being able to bring long-term value to the industry.
"The advantage of compliance can empower a wide range of financial markets, helping more valuable assets enter the blockchain world. For example, many exchanges currently do not dare to launch fundraising products like Launchpad in important markets like the United States, and many projects also hesitate to fundraise themselves. However, we can launch fully compliant fundraising services in the future, which non-compliant exchanges cannot do. This will also drive truly quality development projects to enter the global market."
Before concluding the interview, Tim remained optimistic and humorously proposed a simple model: 'The ceiling is still very high.' From the perspective of all registered users of cryptocurrency exchanges, there are only about 300 million people, compared to the 4 billion Internet users, indicating at least a tenfold growth potential. There is no rush for the current offshore market share, but rather for the next stage of universal growth. Through compliance, HashKey Global hopes to bring more investors from outside the circle into this world to join this financial revolution.