Dialogue with Tim Xing, Director of HashKey Global: Starting from Hong Kong, the breakthrough path for compliant exchanges globally

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Tim shared how the team broke through with compliance strategies and outlined the future blueprint.

Author: BlockTempo

In the competition among global cryptocurrency exchanges, "compliance" has gradually become a watershed. HashKey Group is redefining industry rules through a series of global layouts. BlockTempo held the HashKey Gala Day in Taipei, where we had an exclusive interview with Board Director Tim Xing, allowing us to understand HashKey Global's clear vision and current steps. Tim shared how the team is breaking through with compliance strategies and outlined the future blueprint.

To help readers understand more quickly, Tim first described himself as a "veteran" in the crypto industry born in the 90s, with over seven years of experience closely tied to exchanges, including participating in the operations of Huobi Exchange. At that time, the team launched cryptocurrency contracts and OTC products, propelling Huobi to become the global No. 1. After the tightening of policies in China in 2021, Tim saw richer opportunities overseas and joined Bybit, where, with the support of the Founders, he proudly built Bybit's fastest-growing spot trading team.

Why did he make a glamorous transition to HashKey Global? Tim stated that through his past experiences, he deeply understood the future potential of the compliance market, and the business expansion of compliant exchanges is unstoppable.

"Exchanges can be divided into three tracks: one is non-compliant, one is compliant with licenses, and the last is DEX. In the future, the market share of compliant exchanges will definitely exceed 50%." Tim expressed, pointing out that as crypto finance enters the traditional market, finding the fastest-growing exchange track is understood by industry insiders to be compliant exchanges.

Based in Hong Kong: From "Local Compliance" to "Global Connection"

As a licensed exchange in Hong Kong, HashKey's Hong Kong station has been operating steadily for over a year. Tim emphasized: "The success of the Hong Kong station is due to the comprehensive regulation of the SFC, which not only protects local investors but also provides us with a unique market positioning."

Conservative compliance regulation brings special benefits. One of the core advantages of HashKey's Hong Kong station is its "very smooth" fiat banking channels. Users need not worry about frozen funds or time-consuming reviews; they can directly deposit funds into HashKey's account from the bank, even connecting with Futu Securities, Victory Securities, and Tiger Brokers, allowing them to use the same funds for buying and selling stocks or crypto.

However, Tim is well aware that relying solely on the Hong Kong market is not enough. "Our international station went live in April 2023 and obtained a Bermuda license, marking our first step into the global market." HashKey Global, through its complete digital asset business license in Bermuda, provides global offshore spot market and contract trading services for users in certain regions, while planning to gradually acquire licenses such as VARA in the Middle East and MiCA in Europe, forming a layout of "global structure, local compliance."

The plan for HashKey Global's international station aims to break the regional station limitations of traditional offshore exchanges, having only one international station without regional sub-stations! Users can enjoy the advantages of global liquidity sharing on a single platform, "For example, a European user entering the spot market can transact with an Asian customer; the funding channels are the same. As long as there are fiat banking channels in compliant regions, they can deposit in euros, but the funds can be withdrawn through Asian banking channels. This kind of liquidity integration is the direction of the future."

Tim specifically pointed out that HashKey Global is looking at the endgame, including the U.S., Europe’s MiCA, and extending to multiple country licenses, including the potential licensing system in Taiwan. Multi-regional compliance equals opening up fiat banking channels for fund inflows and outflows, combined with 100% offshore licenses to provide services to second or third world countries, ultimately targeting the largest market that includes both institutions and retail investors.

High Costs Drive Long-Term Value: Building Compliance Capital

Tim did not shy away from discussing the challenges and costs of compliant exchanges during the interview. "The operational costs of compliant exchanges are comparable to traditional banks, especially in risk control and anti-money laundering. We are currently in the process of applying for VARA and MiCA licenses, and the risk control standards are a significant challenge." He cited these high-cost sources, noting that HashKey has partnered with several insurance companies to provide insurance for user assets. "If our users suffer asset losses due to exchange issues, they will be compensated by the insurance company, not our internal insurance fund. This not only meets regulatory requirements but also distinguishes us from other exchanges."

Tim recalled with a smile that since crypto assets are not covered by traditional insurance companies, HashKey Global had to engage with multiple insurance companies before reaching an agreement, starting with a "pilot" collaboration. Other costs include customer KYC, biometric identification, and even requiring that every listed token's cash flow on each chain complies with anti-money laundering requirements, which is an extremely high-cost practice.

"I am a bit excited because we have talked to many on-chain security companies, and in the end, our on-chain KYT/AML partner is Beosin. We discussed for a long time, and ultimately agreed that this is a necessary business for the compliance market. Beosin has already entered this field and will also provide on-chain KYT services for other exchanges' clients, which means we are doing something to promote the industry, and that is very gratifying."

Pushing a little more, and then a little more, over the years it will accumulate into compliance footsteps. Tim returned to a serious tone, stating that compliance is essentially lawmakers examining public needs. If practitioners can create traditional financial value from crypto finance and achieve a respectable level, compliance is about following the ecosystem built by practitioners. With compliance, complexity is simplified.

Expanding Boundaries: Tokenization of Real World Assets (RWA) and New Application Scenarios

As the new year approaches, Tim also previewed new products to look forward to, with the tokenization of real-world assets (RWA) considered the next growth point. Tim revealed that HashKey plans to launch on-chain RWA products based on the Ethereum L2 HashKey Chain in the near future, further expanding market boundaries. "RWA brings traditional financial assets onto the blockchain, which is a process of cross-industry integration that not only attracts insiders but also draws in outside investors." The plan is to push crypto financial products to external clients, which is precisely the customer circle that HashKey excels in.

In addition, HashKey Global is also exploring the possibility of compliant fundraising channels. Tim pointed out that as regulatory policies in places like the U.S. gradually become clearer, HashKey is planning a compliant fundraising channel. "This not only helps quality projects secure funding but also provides investors with a safe way to participate. The ICOs of the past have now evolved into compliant forms."

Dominating Globally, Becoming the Coinbase of the East

Finally, it was inevitable to ask about HashKey Global's long, medium, and short-term goals for the next 10 years, 3 years, and 1 year. Is it growth in trading volume? Is it growth in user numbers?

Tim paused slightly before answering that they are still in the business growth phase. He explained that HashKey's Hong Kong station has experienced the clarification of regulations and formal complete licensing under regulatory protection, which is equivalent to the maturity of an exchange; however, HashKey Global, as an international station, is still in its early stages, at the first step of going live, providing complete offshore services globally, with spot and contract markets, and free listing of tokens.

The second phase involves global fiat banking channels; the third phase involves obtaining more complete licenses in important crypto countries. Tim candidly stated that they are still on this journey, and the current focus of the international station is on functional completeness, product richness, and the experience of early users.

What will the final image of HashKey Global look like?

Tim quickly replied: "We hope to be the Coinbase of the East."

In his view, this means possessing three core characteristics of a crypto enterprise: leading in the compliance market, having international influence in the industry, and being able to bring long-term value to the industry.

"The advantage of compliance can penetrate the vast financial market, empowering more valuable assets and helping them enter the blockchain world. For example, many exchanges now do not dare to launch Launchpad-type fundraising products in important markets like the U.S., and many projects also hesitate to raise funds themselves, but we can launch fully compliant fundraising services in the future, which non-compliant exchanges cannot achieve, thus driving truly quality development projects to the global market."

Before the interview concluded, Tim remained optimistic, smiling as he presented a simple model of "the ceiling is still very high": looking at the registered users of all crypto exchanges, there are only about 300 million people, compared to the 4 billion Internet users, there is still at least a tenfold growth space. He is not in a hurry about the current offshore market share but is focused on the next stage of widespread growth. Through compliance, HashKey Global hopes to bring more investors who are just observing from the outside into this world, joining in this financial revolution.

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