Richard Li-Backed Venture Firm Flags Hong Kong Crypto Potential as US Clamps Down
(Bloomberg) -- CMCC Global, a venture capital company focused on blockchain technology, said the US digital-asset crackdown is opening up opportunities for Hong Kong as the city strives to become a crypto hub.
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The US “is shooting themselves in the foot” and giving other regions a chance to woo innovative businesses, CMCC’s co-founder Charlie Morris said in a Bloomberg Television interview aired Tuesday.
“We see places like Hong Kong having a real opportunity at this point in time to bring those firms and entrepreneurs to the city,” Morris added.
Hong Kong plans to let retail investors trade major tokens like Bitcoin and Ether in a new licensing regime for virtual-asset service providers due June 1. In contrast, the US has turned up the regulatory heat on crypto in the wake of last year’s digital-asset rout and the collapse of the FTX exchange.
Fund Launch
CMCC is launching a $100 million fund to invest in startups focused on blockchain projects. The targets are companies in the Series A and B stages both in its home base of Hong Kong as well as further afield.
“There is a lot of innovation coming from Asia,” co-founder Martin Baumann said. “There’s plenty of capital sitting on the sidelines waiting for the right entry valuations to pull the trigger.”
Baumann and Morris hold a majority stake in CMCC, while Hong Kong tycoon Richard Li and Gemini Trust Co. founders Cameron and Tyler Winklevoss are investors in its holding entity.
Venture capitalists globally have continued to pull back from crypto this year following 2022’s price crash, a string of bankruptcies and the scandal that enveloped FTX, whose co-founder Sam Bankman-Fried is awaiting trial.
Private funding for crypto startups in the first quarter of this year plunged to its lowest level since 2020, according to data from researcher PitchBook.
Last month, Switzerland’s Syz Group said it’s joining with CMCC Global to start a minimum $50 million fund to invest in crypto-focused hedge funds.
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