Is Jack Ma entering Web3? Yunfeng Financial invests $44 million in ETH

Hong Kong-based Yunfeng Financial (00376.HK) recently announced its acquisition of 10,000 Ethereum (ETH) for approximately US$44 million, a move that has garnered widespread attention. Yunfeng Financial was co-founded in 2010 by Alibaba Group founder Jack Ma and Juzhong Media founder Richard Yu. The name "Yunfeng" is derived from one character in each founder's name. The company's predecessor was Wansheng International Securities, founded in 1982 and listed in Hong Kong in 1987. In 2015, Yunfeng Fund completed its strategic acquisition of a controlling stake in the listed platform. In 2018, it completed its acquisition of a 60% stake in MassMutual Asia, thereby obtaining a Hong Kong insurance business license. Targeting Real-World Assets (RWA) and Digital Assets. In 2025, Yunfeng Financial began its investment in the virtual asset sector, purchasing 10,000 Ethereum (ETH) for a total investment of approximately US$44 million, becoming one of the first traditional financial institutions in Hong Kong to make a large-scale digital currency investment. The company also entered into a comprehensive strategic partnership with Ant Digital Technology, a subsidiary of Ant Group, and made a strategic investment in Pharos, a public blockchain project focused on tokenizing RWA (real-world assets). Previously, Pharos also partnered with Morpho, a lending network with over US$9 billion in deposits, to integrate its lending infrastructure into the Pharos mainnet. Yunfeng Financial currently holds Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on institutional financing), and Type 9 (asset management) licenses issued by the Hong Kong Securities and Futures Commission (SFC). It also holds an insurance business license, forming three core business segments: securities, asset management, and insurance. Mankiw LLP notes that traditional financial institutions seeking to dabble in virtual assets can refer to the experience of Tiger Brokers and ZA Bank and apply for and hold a Type 1 license covering virtual asset trading. If they merely provide investment consulting and advice, they can rely on a Type 4 license. However, if they wish to legally manage an investment portfolio that includes virtual assets and provide related services, they must apply for a Type 9 license. However, it's worth noting that almost all virtual currency exchanges are required to hold a Type 7 license, as their core business is automated virtual asset trading through electronic platforms. Yunfeng Fund announced that its ETH holdings will be accounted for as investments in the group's financial statements. It noted that holding ETH will help diversify assets and reduce reliance on traditional fiat currencies, while also exploring Ethereum's potential applications in insurance and new decentralized finance business scenarios. Five years ago, another company, MicroStrategy (later renamed Strategy), was also making significant acquisitions of crypto assets. It pioneered the integration of Bitcoin into its financial strategy. At the time, Strategy acquired large quantities of Bitcoin through equity issuance and debt financing, primarily to hedge against inflation and currency devaluation risks. Over the past five years, Strategy has spent $40.8 billion to acquire over 580,000 bitcoins. By 2025, as the regulatory environment matured, a group of digital asset finance companies (DATs), such as Strategy, emerged. These companies not only incorporate digital assets like Bitcoin and Ethereum into their financial reserves but also prioritize them as a core strategy. Unlike companies that occasionally dabble in crypto, DATs proactively accumulate digital assets and efficiently grow them through capital market operations. Investors gain indirect exposure to crypto assets by investing in their equity, without having to directly hold the cryptocurrency. This trend has spread from Strategy to various companies around the world, including Metaplanet in Japan, Twenty One Capital, which specializes in building Bitcoin "trenchments," and emerging firms that leverage their capital structures to hold crypto assets. Asset classes have also expanded from BTC to include digital assets such as ETH, SOL, XRP, BNB, and HYPE. As of now, the cumulative market capitalization of publicly listed companies holding cryptocurrencies has soared to $160 billion, a significant increase from approximately $90 billion at the beginning of 2024. This marks a new trend for investors to gain crypto exposure through stocks, and more and more companies are considering digital assets as legitimate balance sheet holdings.