The Hong Kong-listed Chinese brokerage firm, Cathay Securities International, has made headlines after receiving regulatory approval from the Securities and Futures Commission (SFC) to offer virtual asset trading services. The announcement triggered a massive surge in investor interest, sending the company’s stock price up by an astonishing 185% within just two days—a dramatic move that has placed it at the center of financial and crypto market discussions.
This development marks a significant milestone in the convergence of traditional finance and digital assets in Asia’s key financial hub.
Regulatory Green Light Fuels Market Frenzy
On June 25, Cathay Securities International officially announced that it had successfully upgraded its existing Type 1 license (for securities trading) to include authorization for virtual asset trading services. This enhancement allows the firm to legally facilitate transactions involving major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), as well as stablecoins like Tether (USDT).
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More importantly, the expanded license permits Cathay Securities to:
- Execute and facilitate virtual asset trades,
- Provide investment advice related to digital assets,
- Issue and distribute virtual asset-linked products, including over-the-counter (OTC) derivatives.
This positions Cathay Securities International as the first mainland-backed brokerage in Hong Kong authorized to deliver a full suite of virtual asset services under one regulated umbrella—a move widely interpreted as a strong signal of growing institutional acceptance of cryptocurrencies in the region.
Stock Surge Reflects Investor Confidence
Market reaction was swift and explosive. According to Yahoo Finance data:
- On Wednesday, shares skyrocketed 198%, closing at HK$3.70.
- The following day, June 26, the stock briefly touched an intraday high of HK$7.02 before cooling off due to profit-taking.
- It ultimately closed down 4.32% at HK$3.54—but still represented a massive gain compared to the pre-announcement close of **HK$1.24 on Tuesday**.
The two-day cumulative rise of 185% highlights not only speculative momentum but also underlying optimism about the long-term revenue potential of integrating crypto services into traditional brokerage operations.
A Strategic Move in Hong Kong’s Evolving Crypto Landscape
Hong Kong has been actively positioning itself as a pro-innovation hub for virtual assets, introducing a comprehensive regulatory framework in 2023 that requires all crypto exchanges operating in the region to obtain SFC licenses.
By securing this upgraded license early, Cathay Securities International gains a first-mover advantage among Chinese financial institutions looking to tap into the growing demand for regulated digital asset access—especially from retail investors and high-net-worth individuals seeking diversified portfolios.
Founded in 1993 and listed on the Hong Kong Stock Exchange in 2010, Cathay Securities International is a subsidiary of Guotai Haotong, a state-owned enterprise ultimately controlled by Shanghai International Group Co., Ltd. Its strong institutional backing adds credibility and stability—critical factors in a space often associated with volatility and risk.
Industry-Wide Shift Toward Digital Assets
Cathay’s breakthrough is not happening in isolation. Other major Chinese brokerages are closely following suit.
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According to reports from China’s official media outlet Securities Times, firms such as China Merchants Securities International and Huatai International are also in the process of applying for similar SFC upgrades to offer virtual asset trading.
This trend underscores a broader shift: traditional financial players are no longer viewing cryptocurrencies as fringe assets but as legitimate components of modern investment portfolios—especially as younger investors demand more accessible and diversified financial tools.
Why This Matters for the Future of Finance
The integration of crypto trading into established brokerage platforms brings several key benefits:
- Enhanced security: Regulated platforms reduce exposure to fraud and exchange failures.
- Greater accessibility: Investors can manage both stocks and digital assets through a single, trusted interface.
- Improved compliance: KYC/AML standards ensure transparency and align with global regulatory expectations.
- Institutional adoption: As more traditional firms enter the space, confidence in digital assets grows across markets.
For Cathay Securities, this move could open new revenue streams through transaction fees, custody solutions, advisory services, and product innovation—potentially transforming its business model over time.
Frequently Asked Questions (FAQ)
What does Cathay Securities’ new license allow?
The upgraded Type 1 license permits Cathay Securities International to conduct virtual asset trading, provide investment advice on digital assets, and issue/distribute virtual asset-related financial products—including OTC derivatives.
Is Cathay Securities the first Hong Kong broker approved for crypto trading?
While not the first overall—platforms like OSL and Hashkey already operate under SFC regulation—Cathay Securities is the first mainland-affiliated brokerage to receive full approval for a comprehensive range of virtual asset services.
Why did the stock price drop after the initial surge?
After a sharp rally, short-term traders often take profits, leading to pullbacks. The 4.32% decline on June 26 reflects normal market correction following extreme volatility—not necessarily a loss of fundamental confidence.
Are virtual assets now fully legal in Hong Kong?
Yes, under strict regulation. Since 2023, only SFC-licensed platforms can offer retail crypto trading services in Hong Kong. All operators must comply with anti-money laundering (AML), cybersecurity, and investor protection rules.
Could other Chinese brokerages follow Cathay’s lead?
Absolutely. With increasing demand from investors and supportive policies from Hong Kong regulators, many expect a wave of similar applications from major financial institutions across Greater China.
How might this affect global crypto markets?
It signals deeper institutional integration of digital assets in Asia. As more regulated entities enter the space, it could boost liquidity, improve market stability, and encourage further innovation in tokenized assets and Web3 finance.
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Looking Ahead: The Rise of Hybrid Financial Platforms
Cathay Securities’ rapid ascent is more than just a stock market anomaly—it reflects a structural shift in how investors view asset classes. The line between traditional finance (TradFi) and decentralized finance (DeFi) is blurring, and hybrid platforms offering both equities and digital assets are likely to dominate the next era of wealth management.
As regulatory clarity improves and technology advances, expect more brokers—not just in Hong Kong but globally—to integrate crypto capabilities. For investors, this means safer, more convenient access to digital assets without sacrificing compliance or security.
For firms like Cathay Securities International, the challenge now lies in execution: building robust infrastructure, educating clients, and maintaining trust in a fast-evolving landscape.
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