In a dramatic display of market volatility, Guotai Junan International (01788.HK) surged nearly 90% within just two minutes at the opening of Hong Kong trading on June 26, briefly touching HK$7.02 per share. The stock then sharply reversed course, dropping as much as 14.86% before recovering slightly. By the end of the session, it closed down 1.6%, marking a breathtaking intraday swing exceeding 100% in volatility.
This rollercoaster price action followed major regulatory news that sent shockwaves through the financial sector: On June 24, Guotai Junan International — a subsidiary of Guotai Haitong Group — officially received approval from the Securities and Futures Commission (SFC) of Hong Kong to upgrade its virtual asset license. The new authorization allows the firm to offer direct virtual asset trading services and provide professional advice related to such transactions.
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A Milestone for Mainland Brokerages in Hong Kong
With this upgraded license, Guotai Junan International has become the first mainland-backed securities firm in Hong Kong authorized to provide comprehensive virtual asset trading services. Its expanded capabilities now include:
- Direct crypto trading for clients (including Bitcoin, Ethereum, and stablecoins like USDT)
- Professional advisory services during trading
- Issuance and distribution of virtual asset-related products, including OTC derivatives
This regulatory green light has ignited investor enthusiasm. On June 25, the day before the wild price swing, shares of Guotai Junan International soared nearly 200%, reaching their highest level in a decade. The momentum reflects growing confidence in Hong Kong’s evolving role as a global hub for digital assets.
As a pioneer in international operations among Chinese brokers, Guotai Junan International went public on the Hong Kong Stock Exchange and has since built a diversified business portfolio encompassing wealth management, brokerage, investment banking, lending, asset management, and financial product distribution.
Strategic Push Into Digital Assets Since Early 2024
The firm's recent success didn't happen overnight. Since January 2024, Guotai Junan International has been strategically expanding its footprint in the virtual asset space. Key milestones include:
- Launching structured products based on virtual asset spot ETFs — the first in Hong Kong
- Gaining SFC approval to act as an introducing agent for virtual asset trading platforms
- Receiving confirmation in early 2025 to distribute tokenized securities or advise on them
- Initiating a digital bond issuance platform
These moves align with Hong Kong’s broader strategy to position itself as a leading center for regulated digital finance. According to a recent report by CITIC Securities, Hong Kong’s commitment to virtual asset development is clear, supported by robust financial infrastructure and a globally aligned regulatory framework.
Hong Kong’s Four-Pillar Regulatory Framework for Virtual Assets
To ensure investor protection and market integrity, the SFC has established a comprehensive licensing system covering key participants in the virtual asset ecosystem:
1. Virtual Asset Trading Platforms (VATPs)
Operators must obtain a Virtual Asset Service Provider (VASP) license. Those offering custodial services typically need a Type 9 license, while some may also require Type 1 (dealing in securities) or Type 7 (automated trading systems).
2. Stablecoin Issuers
Entities issuing stablecoins must hold a dedicated license. Custodians must be recognized banks, and issuers are subject to capital adequacy and risk management requirements.
3. Virtual Asset Funds & Managers
Fund managers must secure SFC authorization, comply with disclosure rules, upgrade to a Type 9 license if managing client funds, and restrict offerings to professional investors only.
4. Virtual Asset Trading Intermediaries
Only firms with a Type 1 license can offer trading services for security-like tokens. These intermediaries must partner with SFC-licensed VATPs and cannot allow direct fiat deposits or withdrawals from client accounts.
How Virtual Asset Revenue Models Work
According to China International Capital Corporation (CICC), revenue from virtual asset trading primarily comes from transaction fees calculated as a percentage of trade volume. There are three dominant service models:
- Direct Exchange Model: Platforms provide order-matching services (and sometimes brokerage)
- Broker-Exchange Partnership: Financial institutions with strong retail reach collaborate with licensed exchanges to offer crypto access
- Wallet-Based Proprietary Trading: Digital wallet providers act as counterparty to user trades, especially where customer demands are less complex
Currently, 11 virtual asset trading platforms have received full SFC approval to operate legally in Hong Kong. While mainland-affiliated brokers like Guotai Junan International are catching up fast, local and international players had an early advantage.
Firms such as Tiger Brokers, Futu Holdings (Futu Securities), Interactive Brokers, and Victory Securities were among the first movers. Victory Securities itself saw its stock surge over 160% on June 26 amid renewed market interest in digital assets.
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Who’s Powering the Backend? HashKey Emerges as Key Partner
While not officially confirmed by all parties, sources cited by 21st Century Business Herald suggest that Guotai Junan International is partnering with HashKey Exchange — one of Hong Kong’s most prominent SFC-licensed virtual asset platforms — to deliver its new crypto trading services.
HashKey’s compliance-first approach and institutional-grade infrastructure make it an ideal backend partner for traditional brokers entering the digital asset space. This collaboration model — where established brokers leverage regulated exchanges — is becoming increasingly common across Asia.
Frequently Asked Questions (FAQ)
Q: What triggered Guotai Junan International’s stock surge?
A: The sharp rise was driven by news that the company received an upgraded SFC license allowing it to offer direct virtual asset trading and advisory services — a first for a mainland-backed broker in Hong Kong.
Q: Can retail investors trade crypto through Guotai Junan International now?
A: While the license permits retail access in principle, initial offerings may be limited to professional investors due to compliance and risk management requirements.
Q: Is Hong Kong fully open to crypto trading?
A: Yes, under strict regulation. Only SFC-licensed platforms can operate, and firms must meet rigorous standards for custody, disclosure, and investor protection.
Q: Why did the stock drop after soaring 90%?
A: Such extreme moves often attract profit-taking. Additionally, some investors may have questioned whether the short-term valuation spike was sustainable given the nascent stage of the business line.
Q: How many crypto exchanges are officially approved in Hong Kong?
A: As of mid-2025, 11 virtual asset trading platforms have received full approval from the SFC to operate in the region.
Q: What types of digital assets can be traded under the new license?
A: Clients can trade major cryptocurrencies like Bitcoin and Ethereum, stablecoins such as USDT, and potentially tokenized securities and digital bonds in the future.
The rapid ascent of Guotai Junan International highlights how regulatory clarity can unlock significant market value. As more traditional financial institutions integrate blockchain-based services, the line between conventional finance and digital assets continues to blur — creating both opportunities and challenges for investors navigating this new frontier.
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