China banned crypto trading years ago, but one of its most influential crypto entrepreneurs is now building a bitcoin investment push just across the border in Hong Kong.
The ban was driven by concerns over financial stability, capital flight, speculative trading, and the energy demands linked to crypto mining. In 2021, authorities moved decisively to shut down domestic exchanges and prohibit trading activity across mainland platforms, forcing much of the industry offshore almost overnight.
Even so, the demand that once fuelled China’s crypto market has not fully disappeared. Instead, it has migrated into offshore structures and regional financial hubs. Hong Kong has since positioned itself as the leading regulated entry point for digital asset activity tied to Chinese capital, drawing in firms and investors looking for compliant exposure to bitcoin and related products.
China’s crypto ban sets the stage for a Hong Kong reset
Li Lin, founder of the former Huobi exchange (now HTX), is relocating a trading system and investment team from his family office, Avenir Group, into Hong Kong-listed Bitfire Group. The move signals a shift from private crypto operations toward regulated asset management within one of Asia’s most tightly watched financial jurisdictions.
Bitfire has agreed to acquire the team and trading infrastructure in a deal worth about $1.6 million, forming the backbone of a new bitcoin-focused strategy called “Alpha BTC.” The firm plans to raise external capital targeting exposure equivalent to more than 10,000 bitcoins, or roughly $760 million at current prices.
Institutional demand drives structured bitcoin products
The strategy will focus on generating returns through derivatives trading, including options tied to Bitcoin and Bitcoin ETF products such as BlackRock’s iShares Bitcoin Trust. The goal is to offer institutional investors a regulated way to gain exposure and yield from Bitcoin holdings, rather than simply holding the asset.
Bitfire executives say demand is growing among Hong Kong-listed companies and institutional investors already exposed to Bitcoin but lacking structured investment products. The move reflects Hong Kong’s broader ambition to position itself as a regulated digital-asset hub, even as mainland China maintains its long-standing ban.
Meanwhile, China’s central bank launched a comprehensive action plan for digital yuan management on January 1, 2026, shifting the e-CNY from a cash equivalent to interest-bearing digital deposits.
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