HashKey Group, the operator of a Hong Kong-based digital asset exchange, is exploring options to borrow HK$500m–$1bn-equivalent (US$64m–$128m) in what could make it the first Asian crypto player to tap the loan market.
HashKey is open to bilateral, club or syndicated loan structures, and will consider pricing, flexibility, covenants, execution certainty and long-term banking relationships in deciding how it wants to raise the financing. The firm prefers US dollar funding, given the deeper liquidity in dollar trading pairs on its exchange, but is also open to Hong Kong dollar facilities.
The borrowing will help HashKey diversify its funding channels beyond equity and support the launch of lending services that will allow its customers to borrow against their digital asset holdings.
“The proposed borrowing is not driven by liquidity needs but rather by the desire to support new business development and build relationships with the banking community,” said Eric Zhu, HashKey’s chief financial officer. “As a newly listed company, we want to explore financing channels to optimise our capital structure.”
HashKey completed a HK$1.6bn IPO in Hong Kong in mid-December. Its shares currently trade around HK$4.08, down nearly 39% from its issue price of HK$6.68, tracking the broader downturn in cryptocurrencies since then. Bitcoin has retreated from its October 2025 peak of above US$120,000 to around US$80,000, though it has fallen only 4.8% since HashKey listed.
Zhu has previously worked in senior leadership positions in finance teams at firms such as Chinese local-services giant Meituan, Chinese internet services firm Baidu and Amazon China. Drawing on his past experience, he outlined a typical phased approach to fundraising: starting with bank loans, progressing to bonds once a company establishes a credit track record, and eventually exploring convertible bonds when market conditions become favourable.
Divergent views
Loan bankers have mixed views on the company and the sector in general.
One senior banker at a large lender said his institution was broadly supportive given that lending opportunities are hard to come by in the current geopolitical environment.
“Our commercial real estate loan book is shrinking, and there are not many new projects in Hong Kong,” the banker said. While the cryptocurrency industry has been criticised for being energy-intensive, HashKey’s staking services, in which holders can lock up their cryptocurrency on the exchange in return for rewards, are based on a proof-of-stake mechanism which does not require fresh mining and so uses far less energy. As a result “we would be open to engaging”, the banker said.
Collateral treatment is one of the main challenges for margin or collateralised lending in virtual assets. Under the Basel framework, virtual assets – including Bitcoin, Ether, and many stablecoins – carry a punitive risk weighting of 1,250%. This stands in stark contrast to the 100% risk weighting assigned to standard corporate assets or real estate. As a result, bank lending to virtual assets is significantly discouraged.
“The regulatory framework around fintech and stablecoins is still not fully clear in our view,” said a second loan banker at a lender active in financing financial technology companies. “Until we have more certainty, we are cautious about committing to this sector.”
A third banker, specialising in structured finance, expressed conditional interest in lending to crypto firms, emphasising the importance of a well-defined use of proceeds. “If the funds are deployed into margin lending with a transparent revenue model, we can get comfortable,” the banker said. “But if the proceeds of the loan are for general corporate purposes, we would have more questions.”
“The market does not yet view these firms as traditional financial institutions,” the banker said. “That is both a challenge – and for some lenders, an opportunity.”
Regulatory developments
Hong Kong is seeking to address this by creating a robust licensing and supervision regime that allows well-regulated virtual assets, including tokenised assets, to qualify for lower risk weightings and, in turn, lower capital requirements.
At a Web3 Festival in Hong Kong in late April, Eric Yip, executive director of the Securities and Futures Commission’s intermediaries division, reaffirmed the market regulator’s “unwavering focus” on implementing clear, practical solutions to facilitate the rollout of services within the virtual asset ecosystem. This follows the SFC’s decision in February to allow licensed virtual-asset brokers to offer margin financing. Initially, such services will be limited to Bitcoin and Ether and available only to institutional investors.
“We want to actively follow policy developments and push forward related business lines,” said HashKey’s Zhu.
HashKey is evaluating several lending models based on client demand. In rising markets, holders of digital assets such as cryptocurrencies often seek to use their holdings as collateral to raise cash, for example to buy additional mining capacity. One option is direct cash lending against crypto collateral. Another is a facilitation model, under which HashKey would connect banks or other licensed lenders directly with borrowers on its platform, acting as an intermediary.
The company expects to charge borrowers annual interest rates of around 6% to 8%, broadly in line with the margin-lending rates charged by Hong Kong’s online brokerages and securities firms. Funding costs from banks are expected to be in the low-to-mid single digits, allowing for a net interest margin.
To date, HashKey has been funded almost entirely through equity. The company’s cash and cash equivalents increased eightfold over the past year to about HK$2.8bn, according to its latest annual report.
Despite the broader crypto market downturn, HashKey increased platform assets by 60% in 2025 to HK$18.4bn. Volumes from institutional clients surged 57% even as activity from retail investors declined. Transactions via omnibus accounts – used by licensed brokers and intermediaries connecting to HashKey’s exchange infrastructure – surged seven-fold.
Beyond its core exchange, HashKey runs an on-chain services division that provides staking infrastructure – validating transactions on proof-of-stake blockchains – with assets under staking exceeding HK$22bn. It also has an asset management arm, which runs venture capital funds focused on blockchain and digital asset companies, with about HK$7.2bn in assets under management.