Guotai Junan International Soars: First Chinese Brokerage Approved for Virtual Asset Trading in Hong Kong Sparks Market Ripple

Original Author：@MetaEraCN；@BTCdayu；@EarningArtist；@haocrypto101

Compiler：WuBlockchain Aki Chen

Original Source Link：

https://x.com/BTCdayu/status/1938065378019840137

https://x.com/EarningArtist/status/1938092437148471370

https://x.com/haocrypto101/status/1938127932989251817

https://x.com/MetaEraCN/status/1938071061146578980

https://mp.weixin.qq.com/s/hrA_P5iAk3wRQ-HvEl3_3Q

(This article is a reposted piece. Readers may refer to the original source for more information. If the original author has any objections to the form of reposting, please contact us and we will make modifications as requested. The repost is intended solely for information sharing and does not constitute any investment advice, nor does it represent the views or positions of Wu Blockchain.)

Event Review

On June 24, Guotai Junan International (01788.HK) announced that it had obtained a virtual asset license in Hong Kong, triggering an over 80% surge in its share price and drawing significant market attention to the sector. According to available data, only four publicly listed companies currently hold virtual asset-related licenses in Hong Kong: OSL, Guotai Junan International (01788.HK), Futu Holdings (FUTU.US), and UP Fintech Holding Limited (TIGR.US, also known as Tiger Brokers). Among them, OSL and Guotai Junan International are listed in the Hong Kong stock market, while Futu Holdings and UP Fintech are listed in the U.S. Guotai Junan International’s new license approval has further intensified market interest in virtual asset-related concept stocks.

According to the official announcement, Guotai Junan International has received approval to upgrade its Type 1 (dealing in securities) license to include virtual asset trading services. The approved scope of services includes: providing direct virtual asset trading services (such as BTC, ETH, and stablecoins like USDT); offering advisory services in the course of virtual asset transactions; and issuing and distributing virtual asset-related products, including over-the-counter derivatives, structured notes, and tokenized securities.

In fact, since 2024, Guotai Junan International has already introduced structured products based on spot virtual asset ETFs in the Hong Kong market and has been authorized by the Hong Kong Securities and Futures Commission (SFC) to conduct business as an introducing agent for virtual asset trading platforms. In February 2025, the SFC released the “A-S-P-I-Re” regulatory roadmap, officially confirming that the stablecoin regulatory framework will come into effect in August. Guotai Junan’s latest moves are seen as aligning precisely with the policy rollout timeline and are regarded as a tangible step in advancing the Hong Kong government’s strategy of establishing the city as an “international virtual asset hub.”

As of June 25, Guotai Junan International’s share price surged sharply at market open and closed with a 198.4% gain, driving the Hong Kong Chinese Securities Firms Index up by 11.75%. In the A-share market, several brokerage stocks — such as TianFeng Securities — hit the daily limit, while East Money Information rose over 10%. The Wind Securities Index closed up 5.52%.

Why the Market Reacted Strongly — The Symbolic Power of Licensing

It is worth noting that MetaEraCN pointed out on X (formerly Twitter) that while Guotai Junan International is the first Chinese-funded brokerage to be officially approved, it is not the only institution pursuing a virtual asset license. According to industry insiders directly involved in license applications and system integration, several Hong Kong-based brokerages — including Victory Securities and Eddid Securities — have already submitted applications to upgrade their Type 1 licenses. Although the market reacted strongly to Guotai Junan International’s approval, Futu Holdings (FUTU.US) has been actively building its presence in the virtual asset space since 2022. Its Hong Kong subsidiary, Futu Securities (Hong Kong), has long connected to compliant platforms and provides services such as digital asset distribution and custody.

According to an analysis posted by BTCdayu on X, the key difference lies in the background: Guotai Junan International is a majority-owned subsidiary of Guotai Junan Securities, with its largest shareholder being Guotai Haitong, which holds a 74% stake. The ultimate controller of Guotai Haitong is the Shanghai State-owned Assets Supervision and Administration Commission (Shanghai SASAC). Reports have indicated that Shanghai SASAC recently announced plans to invest RMB 10 billion over the next five years to support financial innovation and technological development. Against this backdrop, Guotai Junan International’s push into virtual assets has been framed by the market as a “national-level strategic pilot,” suggesting potential first-mover advantages in policy support, funding, and resource access.

In contrast, Futu Holdings, as an internet-based brokerage under private ownership, has limited space for such policy-driven narratives and exerts relatively less influence within the domestic financial system.

Moreover, Guotai Junan International is the first Chinese state-backed brokerage to be approved for offering a full suite of virtual asset services — including trading, advisory, and distribution — under a regulated framework. This has given it symbolic significance as a “first mover” or “pathfinder,” resulting in a scarcity premium in the market. Although Futu had already obtained similar qualifications via its subsidiary as early as 2023, its identity as an internet platform sets it apart from traditional brokerages. Market expectations for its Web3 transformation were already priced in, leaving little room for further upside from additional catalysts.

In contrast, Guotai Junan International’s stock remained in a consolidation phase at low levels throughout 2024, with its virtual asset developments not yet fully reflected in its valuation. More importantly, Guotai Junan International (1788.HK) is a Stock Connect-eligible security, allowing A-share investors to access the stock via the northbound trading channel. Amid surging interest in brokerage, Web3, and stablecoin themes within the A-share market, mainland capital has shown a preference for gaining exposure to relevant beneficiaries via southbound allocations through Hong Kong-listed equities. This dynamic has intensified price volatility and capital inflows into the stock.

By comparison, Futu Holdings (FUTU.US), as a U.S.-listed company, is not included in the Southbound Stock Connect list and therefore cannot receive direct investments from A-share capital. Even though its qualifications and capabilities are comparable, it is less likely to benefit from a “policy-driven narrative” or thematic speculation.

Opportunities and Risks Facing Chinese Brokerages and Exchanges

From Guotai Junan International’s strategy, it is clear that its compliance path into the virtual asset market is based on its identity as a traditional brokerage — by upgrading its existing licenses and leveraging local regulatory channels. However, according to EarningArtist, most brokerages do not operate their own virtual asset exchanges. Instead, they primarily access trading services via omnibus accounts established on licensed platforms such as HashKey. Multiple firms — including Futu, Tiger Brokers, and ZA Bank — have adopted similar models, and strictly limit the scope of eligible clients. For example, many require clients to hold Hong Kong or overseas residency, excluding mainland Chinese residents from participation.

As a result, while the licensing developments appear promising, the actual virtual asset services being offered are currently limited to a small group of offshore investors. For the vast majority of mainland investors, access remains out of reach despite growing interest. Even for those who qualify by identity, they must complete tax information reporting and comply with cross-border capital controls — requirements that pose a significant barrier for ordinary retail users.

Mainland users are effectively excluded by regulatory barriers, while overseas investors are already accustomed to using global platforms such as Coinbase and Binance, which offer greater liquidity and more diverse product offerings. Under this dual constraint, how Guotai Junan International can translate its new virtual asset business into a sustainable revenue stream remains unclear. The sharp reaction in the capital market appears to be more of a speculative bet on future possibilities than a reflection of current profitability.

Through this type of collaboration, brokerages provide clients with compliant access channels, while exchanges offer trading and clearing infrastructure. Native platforms like HashKey, by virtue of their licensed status, can attract traffic from large brokerages — creating a complementary relationship. As a result, market enthusiasm also extends to related service providers and the broader virtual asset exchange segment. According to data from Nansen, HashKey’s platform token HSK surged over 50% in the past 24 hours. Meanwhile, OSL (00863.HK) saw its share price rise 18% on June 25 to HK$14.6, marking a one-year high.

Regulatory Risks in Guotai Junan International’s Compliance Path

In summary, the crypto business that brought Guotai Junan International into the spotlight is fundamentally built on the infrastructure provided by HashKey. Whether it’s trade matching, asset custody, clearing processes, or on-chain asset management, all core operations run on the omnibus account system established by HashKey. Within this setup, Guotai Junan International primarily serves as a front-end distribution channel and a provider of brand trust.

In other words, this is a “brokerage + exchange” collaborative model: the brokerage contributes licensed access and client resources, while the exchange provides technological infrastructure and market depth. On the surface, this appears to be a rational division of labor based on complementary advantages.

However, as noted by haocrypto101, a key underlying risk lies in the highly interdependent structure between brokerages and compliant exchanges. If, in the future, a licensed exchange expands its proprietary trading activities, encounters technical failures, or faces regulatory controversies, this close coupling could make it extremely difficult for brokerages to isolate or manage their exposure independently. One direct consequence of such operational separation is diminished trust and reduced control over the products offered.

Moreover, HashKey’s near-monopoly status in Hong Kong is largely the result of current regulatory requirements. Under existing SFC rules, any brokerage holding a Type 1 license that engages in virtual asset trading must use a liquidity provider that holds a Type 7 license — i.e., a licensed Virtual Asset Trading Platform (VATP). For a prolonged period, only two compliant VATPs — HashKey and OSL — have been available in the Hong Kong market. This has led many brokerages and financial institutions to overwhelmingly rely on these two platforms for virtual asset services.

While this regulatory design ensures compliance, it also has the side effect of dampening market competition. The limited number of available VATPs has resulted in insufficient liquidity, with trading prices often deviating from those in major Western markets. As a result, many Hong Kong-based investment institutions prefer to purchase crypto assets directly through platforms in jurisdictions like the United States, where they can access deeper liquidity and better pricing.

Meanwhile, many brokerages are dissatisfied with the limitations of the current trading service ecosystem. While maintaining regulatory compliance, they are seeking more competitive pricing and higher-quality service offerings. As a result, some institutions have begun applying for their own VATP licenses, aiming to connect with global liquidity providers to enhance trading efficiency and client experience. This move is seen as a step toward greater business autonomy and service differentiation.

In conclusion, the approval of Guotai Junan International — a Chinese state-backed brokerage — for a virtual asset trading license in Hong Kong marks a significant step in the integration of traditional brokerage models with blockchain technology. This milestone reflects Hong Kong’s effort to build a digital asset financial ecosystem that balances regulatory compliance with market dynamism. It also signals a broader shift in market focus: away from purely speculative assets like Bitcoin and altcoins, and toward a more structured framework of “regulated virtual assets + financial infrastructure,” including stablecoins, tokenized bonds, and blockchain-integrated brokerages.

Hong Kong is actively seeking to leverage its regulatory strengths to drive financial innovation and reclaim its position as a global financial center. The enactment of the Stablecoin Bill in May and the forthcoming licensing regime in August are part of this broader strategy, aimed at carving out a regulatory space for offshore stablecoins. The green light given to Guotai Junan opens the door for licensed financial institutions and exchanges to serve as incubators for stablecoin distribution channels. Moreover, Hong Kong’s stockpile of over RMB 1 trillion in offshore renminbi deposits provides a strong liquidity foundation for stablecoins, offering brokerages a significant opportunity to participate in the distribution infrastructure.

However, regulatory policy on the Chinese mainland remains unequivocal: Bitcoin and other crypto assets are still not recognized as legal tender, and financial institutions as well as non-bank payment providers are prohibited from offering account opening, fund transfer, or clearing and settlement services related to virtual currencies. As a result, for ordinary mainland investors seeking to participate in virtual asset services offered in Hong Kong, they must first legally obtain a Hong Kong-based account, and their source of funds and personal background must meet the compliance requirements for cross-border capital scrutiny — even if the services are provided by fully licensed entities in Hong Kong.

Both Guotai Junan International, Futu, and Tiger Brokers have explicitly prohibited mainland Chinese residents from opening accounts for digital asset trading. Nonetheless, drawing from the precedent of the Stock Connect program — which has evolved from institutional to individual participation — it is possible that in the future, qualified mainland investors (such as QDII or Stock Connect clients) may gain access to virtual asset investments through regulator-approved channels.

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