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(Kitco News) – Following recent reports of an uptick in crypto-related activity in Hong Kong, which is taking place with tacit approval from regulators in China, the special administrative region could potentially issue virtual asset trading licenses to at least eight cryptocurrency-related firms by the end of this year.

This revelation was made by Angelina Kwan, the CEO of financial services firm Stratford Finance and a former regulator of the Hong Kong Securities and Futures Commission (SFC), during a speech at the Wow Summit in Hong Kong on Wednesday, Forkast news reported.

Kwan previously commented that Hong Kong regulators have received an influx of applications from crypto companies looking to set up shop in the region and encouraged firms to act quickly to avoid a backlog in applications when the new licensing regime takes effect in June.

Under the new regime, all virtual asset trading platforms doing business in Hong Kong or actively marketing to investors in the region will need to be licensed by the SFC. It also allows retail investors to access crypto trading services for certain large-cap tokens, such as Bitcoin (BTC) and Ether (ETH).

The agency initiated a public comment period on the new regime in late February, and parties interested in sharing their views and expertise on the regulator’s requirements must submit their comments by Friday.

According to Christian Hui, the Secretary for Financial Services and the Treasury in Hong Kong, more than 80 virtual asset-related companies from China and foreign nations have already expressed interest in establishing a presence in Hong Kong as it looks to become a leading cryptocurrency and Web3 hub.

This includes the Seychelles-based OKX cryptocurrency exchange, which announced on Tuesday that it set up an office in Hong Kong and will apply for virtual asset licenses to operate digital asset services in the city.

On Thursday, Bloomberg reported that a new Hong Kong-based fund – led by Ben Ng, a venture partner at the Asian private equity firm SAIF Partners, and tech investor Curt Shi – plans to raise $100 million this year to invest in digital asset startups to help the city achieve its goal of becoming a regional fintech hub.

The fund, dubbed ProDigital Future, has reportedly already secured at least $30 million in funding commitments and comes at a time when Hong Kong is looking to attract crypto companies and talent to help reverse the slowdown that three years of Covid-related border controls have had on its financial center.

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ProDigital Future will provide funding for early-stage and developing ventures with a focus on tech companies with ties to China that are making the transition to Web3. The fund has already invested in six digital asset projects, including Hong Kong-based metaverse company GigaSpace and Australia-based digital sports club One Future Football.

According to Shi, there is a high level of interest from residents in Hong Kong and the fundraising process has been “relatively smooth” thus far. There has also been engagement from Chinese family offices that have historically invested in Australia and Singapore.

“I believe that Hong Kong will continue to have a certain degree of openness and flexibility,” he said. “While our portfolio and fund will embrace Hong Kong and its policies, we will continue to have a presence in Australia, Singapore, as well as in Europe and the US.”