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The explosive growth of HashKey Exchange's Over-the-Counter (OTC) block trading business (hereinafter referred to as OPT) in Hong Kong has attracted significant attention. The business saw a year-over-year increase of over 400% in Q1 transaction volume, a 28-fold increase in March alone, and a daily transaction volume exceeding $100 million in Q2. By leveraging licensed compliance, liquidity aggregation, and a bank-grade security system, HashKey Exchange is using professional functional innovation to solve industry challenges.

With the accelerated layout of traditional capital, the cryptocurrency market in 2025 has shown significant institutional characteristics. The demand for institutional-level block trades in the crypto industry has become increasingly prominent. Specifically, the global listed companies' Bitcoin holdings increased by 16.11% quarter-over-quarter to 688,000 in Q1. The number of holding companies increased to 79, with block trades of over $5 million seeing a year-over-year increase of 210%, amounting to over $2.1 billion in Bitcoin flowing from retail wallets to institutional custody accounts.

However, the three major pain points of the industry—lack of compliant institutions, fragmented liquidity, and fund security risks—are constraining market expansion.

Trust Crisis in the Compliance Vacuum: How Licensed Operations Rebuild Industry Credibility

One of the core drivers of HashKey OPT's strong growth is its strict licensed and compliant operations, which have laid a solid foundation for transactional trust.

The virtual asset industry has long been plagued by the trust dilemma of "unlicensed operations." Non-compliant trading platforms often fabricate regulatory qualifications to create the appearance of compliance, attracting investors with unrealistic high-yield promises that defy market logic. They then implement fund retention through restrictions on withdrawals and additional terms such as "margin" and "unfreezing fees." Technically, these platforms often suffer from chaotic hot wallet private key management and ineffective isolation between hot and cold storage, leading to frequent hacking incidents. These platforms also deliberately weaken the KYC (Know Your Customer) review process, becoming a grey channel for money laundering, darknet transactions, and even the flow of ransomware proceeds. This kind of ecosystem not only poses a high decision-making threshold for ordinary investors but also deters institutional investors due to the high cost of compliance risk assessment.

In stark contrast, HashKey Exchange, as one of the first licensed retail virtual asset exchanges in Hong Kong, holds licenses from the Securities and Futures Commission (SFC) for Type 1 (dealing in securities) and Type 7 (providing automated trading services), as well as a virtual asset trading platform license. It strictly complies with the Securities and Futures Ordinance and the Anti-Money Laundering Ordinance, undergoing monthly穿透式 (penetrative) supervision by the SFC. This compliance status forms a clear industry contrast. As of January 2025, HashKey was the only Hong Kong licensed exchange in the top ten globally on CoinGecko (ranked 7th), with its compliance becoming a core criterion for institutional investors to select a cooperation platform.

Licensed compliance effectively addresses the trust blind spots of traditional unlicensed platforms, providing a security anchor for institutional funds to enter the market, equivalent to that of traditional financial markets. This is also an important reason why many institutions and large capital investors choose HashKey's OTC block trading as their trading channel.

Liquidity Stratification Dilemma: How Aggregation Solves the Transaction Efficiency Bottleneck

HashKey OPT's breakthrough in market efficiency stems from its creative solution to the liquidity fragmentation dilemma, building an extremely fast and precise trade execution system.

The virtual asset market has long faced the problem of uneven liquidity distribution. Small and medium-sized platforms have thin order books, leading to high slippage in large transactions. The liquidity monopoly of top platforms exacerbates market fragmentation. When institutional investors conduct large transactions in the secondary market, they often encounter severe slippage. For example, orders of over $5 million on non-top exchanges can generate an average price impact of 1.5% to 3%. Market makers are reluctant to quote, and the bid-ask spread widens to 2-3 times the normal level. During market volatility, liquidity tends to evaporate. Some exchanges use "counter trading" to split large orders, prolonging the transaction time. Liquidity fragmentation forces institutions to disperse their orders, further fragmenting the market and creating a vicious cycle. Therefore, institutional users need to rely on block trades to avoid such losses in the secondary market. HashKey OPT has built an industry-leading liquidity solution through a dual-driven approach of "aggregation + innovation." It launched the "flash exchange" feature in 2024 and introduced a dedicated "block trading" section in April 2025. HashKey OPT aggregates over 20 global first-tier liquidity providers, relying on a professional trading network and efficient matching mechanism to provide solid trading depth for large transactions. This ensures efficient trade execution and controllable costs, significantly improving the efficiency of block trades.

In Q1 2025, the volume of OPT business doubled compared to the previous quarter, becoming the fastest-growing core business segment. Meanwhile, the platform's in-depth cooperation with top global banks has enabled one-stop settlement of fiat and digital assets, significantly reducing the friction of capital flow. This combination of "liquidity aggregation + technology empowerment + settlement optimization" precisely meets the core demands of institutional clients for transaction efficiency and cost control.

Fund Security Risks: A New Industry Paradigm Under Fund Security Protection

Moreover, the continuous rise in market recognition of HashKey OPT is supported by its innovative protection and meticulous construction of fund security in collaboration with top global banks.

The virtual asset industry has long faced severe fund security challenges. The risk of "black U" (illicit funds) hangs like the Sword of Damocles over institutions, which, once involved, face fund freezing, legal disputes, and reputational collapse. The chaos in fiat on-and-off ramps, due to non-official channels, leads to inefficient capital flow and regulatory risks. Additionally, there are frequent loopholes in asset custody, with an imbalance in the ratio of cold and hot wallets and a deployment rate of hardware security modules (HSM) of less than 10%. Hacking attacks have caused significant losses to institutional assets. These pain points, when compounded, make institutions extremely cautious about virtual asset trading, limiting the industry's development momentum.

HashKey OPT has built a targeted defense system. All digital assets undergo strict on-chain inspection, using blockchain analysis technology to trace the source of assets and eliminate "black U" risks from the source. Users trade directly with licensed exchanges, whose licenses are strictly reviewed by regulatory authorities such as the Hong Kong SFC, ensuring the legality and compliance of the entire trading process and avoiding involvement in illegal fund flows. In terms of fiat channels, it connects with mainstream large banks such as Standard Chartered, leveraging bank-grade risk control systems to ensure clear and transparent capital transactions. This is a rare high-quality channel in the crypto field, solving the compliance难题 (dilemma) of institutional capital inflows and outflows. Meanwhile, it strengthens vault management, using advanced technologies and management processes such as multi-signature and real-time monitoring to ensure the security of asset storage. This multi-dimensional protection of "on-chain tracing + licensed trading + compliance channels + smart vaults" precisely solves industry pain points, providing a solid guarantee for institutional investors' fund security and injecting new momentum into the healthy development of the virtual asset market.

Conclusion: Industry Insights from Single-Point Breakthrough to Ecosystem Restructuring

The explosive growth of HashKey OPT has proven the market logic of "functional compliance and institutional trading." While the industry is still paying the trust cost for unlicensed chaos, HashKey's functional design based on licensed compliance, liquidity aggregation, and asset security is defining a new paradigm for the virtual asset industry—only by turning pain points into the fulcrum of functional innovation can sustainable growth be achieved in the wave of institutionalization.

In the future, HashKey Exchange is expected to further drive the virtual asset market from "wild growth" to "value-driven" leap. The "licensed compliance + efficient liquidity + asset security" model it has explored not only provides a replicable path for the industry to solve development dilemmas but also proves to the traditional financial system that, in the balance between technological innovation and regulatory frameworks, the virtual asset market can fully grow into an important part of a mature financial ecosystem.