Yunfeng Securities receives approval for virtual asset trading services; Jack Ma enters Web3 in all its dimensions

Jessy, Golden Finance

On September 9th, Yunfeng Securities Co., Ltd. recently received approval from the Hong Kong Securities and Futures Commission (SFC) to upgrade its existing securities trading license (Type 1 license) to provide virtual asset trading services. This financial platform, closely linked to the "Jack Ma faction," has not only entered the compliant digital asset channel, but its parent company, Yunfeng Financial (00376.HK), has also previously disclosed its purchase of approximately 10,000 Ethereum, for a total investment of US$44 million.

Jack Ma's accelerated investment in the crypto industry is not only a hot topic within the industry but also a bellwether. With large capital investors entering the market, the crypto industry is becoming an increasingly important part of mainstream finance.

Jack Ma's All-Round Bet on Web3

Yunfeng Securities is affiliated with the Hong Kong-listed Yunfeng Financial Group (00376.HK). Yunfeng Financial's largest shareholder is Jade Passion Limited, holding a 47.25% stake. This company is an investment entity under Yunfeng Capital. Yunfeng Capital was co-founded in 2010 by Alibaba founder Jack Ma and Juzhong Media founder Yu Feng. Ma indirectly holds a stake in Yunfeng Financial through his 40% stake in Shanghai Yunfeng Investment Management Co., Ltd. Jack Ma himself indirectly holds a stake in Yunfeng Financial through Yunfeng Capital and is widely considered a key figure behind the group. As a licensed securities firm, Yunfeng Securities' core businesses include securities brokerage, wealth management, asset management, and related fintech services. In recent years, the group has not yet reached the top tier of Chinese securities firms in terms of market size and trading volume in Hong Kong, and its market share is relatively small compared to giants such as Guotai Junan International, CLSA, and Futu. However, perhaps thanks to the frequent reports of Web3 industry developments since September, its stock price has also risen. Since September, its share price has doubled.

In early September of this year, Yunfeng Financial disclosed that it had purchased approximately 10,000 Ethereum on the open market, totaling approximately US$44 million, and listed it as a "strategic reserve asset."

On September 1, Yunfeng Financial announced a strategic partnership with Ant Financial. The two parties will jointly explore cutting-edge fields such as RWA and Web3 through the next-generation Layer 1 public chain Pharos platform.

In Yunfeng Financial's announcement, it was clearly stated that the purchase of ETH is intended to support the group's strategic layout in cutting-edge fields such as Web3, RWA tokenization, digital currency, ESG zero-carbon assets, and artificial intelligence, provide infrastructure support for RWA tokenization, and explore innovative applications of ETH in the insurance business. From the above, it's clear that Yunfeng Financial is truly making a comprehensive play in the Web3 race. With major capital entering the market, the future of Web3 is already here. With this approval, Yunfeng Securities can provide compliant trading services for virtual assets like Bitcoin and Ethereum to both retail and professional investors. The SFC's regulatory arrangements don't require every brokerage firm to operate an independent virtual asset exchange (VATP). For brokerages like Yunfeng Securities, they open "omnibus accounts" for clients on SFC-licensed VATPs or regulated platforms. The brokerage is responsible for traditional brokerage functions such as client engagement, compliance due diligence, KYC/AML, and trade order matching, while actual digital asset trading and settlement is handled by regulated trading platforms or custodial mechanisms. The Hong Kong Securities and Futures Commission (SFC) established the VATP licensing system in 2023 and will continue to promote brokerage firms to upgrade their licenses from 2024 to 2025. Since the beginning of this year, several brokerage firms listed or operating in Hong Kong have applied for and received approval to upgrade their "No. 1 license" to provide virtual asset trading services. For example, Guotai Junan International (1788.HK) received approval in June. Others approved or in the process of upgrading include Tianfeng International, Eastmoney's Hafu Securities, Futu Securities (Hong Kong), Interactive Brokers, and the international subsidiaries of several Chinese brokerage firms. Overall, dozens of traditional brokerage firms have entered the virtual currency asset trading compliance services sector through license upgrades, partnerships with the VATP, or the opening of integrated accounts. Yunfeng Securities, a key financial platform for the "Jack Ma" group in Hong Kong, has officially entered the virtual asset sector under a compliant framework. This not only demonstrates the trend of deep integration between traditional brokerages and digital assets, but also highlights the fact that large capital players are incorporating Bitcoin, Ethereum, and other assets into their asset allocation portfolios. This not only signals that Hong Kong is accelerating the development of a world-leading compliant virtual asset market, but also foreshadows that digital assets will no longer be limited to speculative tools, but will gradually become an integral part of the mainstream financial system. As more brokerage firms are approved, Hong Kong may become one of the few financial centers in the world that allows retail and institutional investors to directly trade virtual assets under a compliant system.