(Yicai Global) March 4 -- Shares in Huobi Technology Holdings surged as much as 10 percent today after the asset management unit of the blockchain tech solutions provider became the second company in Hong Kong to be approved to set up virtual currency investment funds.

Huobi Tech’s stock price [HKG:1611] closed up 3.85 percent today at HKD22.95 (USD3). Earlier in the day it had reached HKD24.30. The firm’s stock price has more than doubled since the beginning of the year giving it a market capitalization of HKD7 billion (USD902 million).

Huobi Asset Management Hong Kong has been approved by the Securities and Futures Commission to deal solely in virtual assets, the Securities Times reported today, citing the unit. As such it is preparing to issue three cryptocurrency funds, namely a Bitcoin tracking fund, an Ethereum tracking fund and a multi-strategy fund.

“I am very pleased to see that the Huobi Asset team has achieved such a breakthrough,” a manager at the company said. “The SFC approval arrives just in time. Institutions such as US electric car giant Tesla are gradually introducing Bitcoin into mainstream asset allocation in the US. It is expected that Asia will follow suit,” he added.

Digital currency trading platforms that issue securities will be treated the same as traditional brokers and must apply for the necessary licenses, the SFC said back in November 2019. Huobi Asset has been granted permission to provide securities consulting and asset management services, known as Type 4 and Type 9 permits. The latter allows it to introduce cryptocurrency fund products.

Huobi Asset is now the second virtual fund manager to be approved by the SFC and the first in the special administrative region to issue active investment strategy e-funds, which means the fund can buy different types of virtual assets. It is also the first to let investors deposit and withdraw funds in both regular and digital currencies.

Huobi Tech runs the cryptocurrency exchange Huobi, set up by founder Leon Li in 2013. It quickly became China’s largest digital asset trading platform, but after the Chinese government banned virtual currency transactions in 2017, the firm adjusted its business structure to focus on overseas operations.

Huobi Asset’s fund products are backed by US law firm Sidley Austin, offshore legal advisers Mourant, Singapore financial services firm DBS Group Holdings and US digital asset service provider Fidelity Digital Assets, the report said.

Editor: Kim Taylor