Yunfeng Financial Group, backed by Alibaba Group Holding founder Jack Ma, said it was investing in the cryptocurrency ether as part of its reserve assets, as the company expands into Web3 amid Hong Kong’s digital asset initiative.
To date, Hong Kong-listed Yunfeng has invested US$44 million to acquire 10,000 ether for its “strategic reserve”, according to an exchange filing on Tuesday. Ether would provide “key infrastructure support” for real-world asset (RWA) tokenisation activities, Yunfeng said, adding that it was exploring potential applications of ether within its insurance business.
The group derives most of its revenue from its insurance business, which generated nearly HK$2.8 billion (US$359 million) last year. The company’s net profit reached HK$471 million.
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Hong Kong-headquartered Yunfeng is a subsidiary of Cayman Islands-incorporated Yunfeng Financial Holdings, which is 29.85 per cent owned by Ma and 70.15 per cent by Yu Feng, chairman of Yunfeng Financial Group. The companies’ names combine the Chinese given names of its two founders.
Shares of Yunfeng fell more than 5 per cent on Wednesday morning.
Yunfeng founders Jack Ma (left) and Yu Feng. Photo: Handout alt=Yunfeng founders Jack Ma (left) and Yu Feng. Photo: Handout>
Last month, Yunfeng announced a major push into what it called “frontier areas”, which included Web3. The company planned to increase investments in digital currencies such as stablecoins and “actively explore” RWA tokenisation, according to its filings.
RWA tokenisation is the process of converting tangible assets into digital tokens on a blockchain.
Yunfeng’s securities subsidiaries have applied to Hong Kong’s Securities and Futures Commission for upgrades to their licences, which would enable them to “offer comprehensive virtual asset trading services” and manage portfolios with digital assets.
The company’s foray into digital assets coincides with rising cryptocurrency prices. Ether has increased 70 per cent since last year, while bitcoin is trading nearly 90 per cent higher than a year ago.
More mainland Chinese companies have launched digital asset initiatives in Hong Kong, where the government has established regulatory frameworks to promote the city as a hub for such businesses.
