Interview & Article by Anderson Sima, Executive Editor, Foresight News
As the global rush to adopt blockchain and virtual currencies intensifies, Hong Kong is emerging as a testing ground for China’s virtual assets. At this year’s Hong Kong Fintech Week, several government officials, including Financial Secretary Paul Chan, expressed strong confidence in the growth of virtual assets in Hong Kong.
Among the key players in this space is OSL, a virtual currency trading platform that represents the region’s regulatory progress. The first platform to obtain a VASP license in Hong Kong, OSL (HK: 863, formerly BC Technology) is not only a pioneer in regulatory compliance but also has attracted over 500 million Hong Kong dollars in investment from Singapore’s sovereign wealth fund, GIC.
In November 2023, following a round of new shareholder investments, OSL has further honed its focus on compliance-centered virtual asset business. The company is also integrating Real World Assets (RWA) into the blockchain ecosystem, enabling the on-chain trading of traditional financial products like green bonds and money market funds.
OSL’s half-year financial report for 2024 reveals a more than 90% reduction in losses, now down to just 9.6 million Hong Kong dollars, with its stock price recently rising by 2.16%. Foresight News sat down with OSL’s Chief Institutional Officer, Eugene Cheung, who has a long-standing career in traditional finance and has led initiatives such as Bond Connect. Zhang shared insights on OSL’s direction, the future of compliant exchanges, and how blockchain is transforming finance.
Foresight News: Can you briefly introduce your professional background?
Eugene Cheung: I’ve spent many years in traditional finance, including nearly a decade at the Chicago Mercantile Exchange (CME), where I contributed to initiatives like Bond Connect, focusing on financial products for both the mainland and Hong Kong markets. Over the years, I’ve been closely watching the crypto industry. In 2021, I joined Bybit to help build its institutional business. Now, with OSL, I am excited to promote the development of compliant virtual currency trading. I see a lot of potential in this field, especially platforms that connect with the business ecosystems of banks, brokers, and asset managers — all key players in traditional finance.
Foresight News: What was it like shifting from traditional finance to the emerging world of crypto assets, especially in charge of institutional business?
Eugene Cheung: When I first made the transition, I did experience some discomfort. The pace in crypto is far faster than in traditional finance. In crypto, decisions are made and executed quickly, and feedback is almost instantaneous—more similar to the tech industry than traditional finance. Traditional finance is more methodical and process-driven, while in crypto, there’s a sense of entrepreneurial flexibility that’s refreshing. However, the industry is still maturing, so many institutional products and services need to be built from the ground up, which makes this space exciting.
Foresight News: Has OSL’s business strategy and focus changed after the new shareholders joined?
Eugene Cheung: The new shareholders provide not only financial support but also a fresh perspective on our development. We’ve identified two key directions moving forward. First, we will continue to solidify our position in compliant virtual asset services, especially in OTC and custody services. Second, we are actively exploring the tokenization of Real World Assets (RWA), introducing traditional financial assets into the blockchain for more efficient on-chain trading. Our current collaboration with Huaxia Fund and Franklin Fund on asset tokenization is a significant step forward. Our new investors are optimistic about the long-term potential of virtual assets and blockchain, and they are committed to investing more resources to support this vision.
Foresight News: There are currently two compliant exchanges in Hong Kong. How do you view the competitive relationship with HashKey Exchange?
Eugene Cheung: There are only two publicly listed cryptocurrency trading platforms in the world: Coinbase and OSL. As a listed company, our financial information is clear and transparent, audited by one of the Big Four accounting firms, PricewaterhouseCoopers. This transparency reduces the due diligence burden for institutional investors and high-net-worth clients. For the industry to continue to grow, compliance is critical. Traditional financial institutions will increasingly prioritize compliance when choosing trading platforms. Compliance is not just about adhering to regulations; it’s about creating an ecosystem where the industry can thrive in the long term.
Foresight News: RWA has been a hot topic recently. What is OSL’s progress in this area, and do you see it as a key future business focus?
Eugene Cheung: RWA is indeed one of our key development areas. Both the Hong Kong Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) are actively promoting RWA, with initiatives like sandbox programs to encourage innovation. We’re currently collaborating with Huaxia Fund and Franklin Fund on the on-chain tokenization of money market funds, including custody, distribution, and trading. The project is already in the feedback and optimization phase, and there’s a possibility it could be launched with the Hong Kong government’s support within the next year. The goal of RWA is to improve the circulation of real-world assets on the blockchain, allowing us to integrate more seamlessly with traditional finance.
Foresight News: Beyond RWA, is OSL planning any new ventures in derivatives or stablecoins?
Eugene Cheung: Within a compliant framework, we are also focusing on derivatives and stablecoin businesses. We’re in discussions with several local Hong Kong stablecoin issuers to help their development through white-label solutions or infrastructure support. At the same time, we’re looking to facilitate the compliance of futures and other derivative products. The futures market is a critical risk-hedging tool for institutional clients, and we want to ensure that we can offer these products within the bounds of regulatory approval. Investor protection is paramount, and regulators are cautious about products with high leverage, especially for retail investors.
Foresight News: Does OSL have any global market expansion plans?
Eugene Cheung: Our focus remains on the Hong Kong market, though we’re closely monitoring global regulatory developments. The virtual currency industry is global, but regulatory policies differ greatly from country to country. We plan to expand into other markets in a measured way, always in compliance with local laws. However, the core of our strategy remains Hong Kong. Not only is it a major financial hub in Asia-Pacific, but it’s also close to the mainland market, one of the largest financial markets in the world. We aim to leverage Hong Kong’s compliance advantages to integrate more closely with mainland China’s financial system.
（Editor’s Note: On November 4, OSL Group announced that its wholly-owned subsidiary would acquire an 81.38% stake in CoinBest, a cryptocurrency trading service provider licensed by Japan’s Financial Services Agency (FSA), marking its entry into the Japanese market.)
Foresight News: One last question, how do you view the future development of cryptocurrencies?
Eugene Cheung: Bitcoin is increasingly being embraced by traditional financial institutions, and its role as “digital gold” is becoming more firmly established in the long term. The launch of Bitcoin ETFs has helped stabilize its price volatility, and more investors are seeing it as a tool for hedging risk. Compared to gold, Bitcoin offers greater transparency and portability. Looking ahead, I believe we will see a wider tokenization of assets, with more real-world assets being moved onto the blockchain. This will drive the transformation of asset-backed lending and collateralization. We’re talking about potentially hundreds of billions, if not trillions, of new assets entering the virtual asset market. Compliant exchanges will play a pivotal role in this transformation by ensuring the security, transparency, and regulatory compliance of asset tokenization, which is crucial for the long-term development of the industry.