Open token deposit service, Futu Securities enters the crypto market

Original author: 1912212.eth, Foresight News

On the morning of May 7, Twitter user FORAB revealed that Futu Securities is beta testing a token recharge feature, supporting Bitcoin, Ethereum, and USDT. Just a few hours later, this was confirmed by the official source. Hong Kong fintech giant Futu Securities International (Hong Kong) Limited (hereinafter referred to as "Futu Securities") announced that its core trading platform Futu NiuNiu has officially launched BTC, ETH, and USDT recharge services. Eligible investors can recharge tokens and trade cryptocurrencies through the one-stop trading platform Futu NiuNiu to obtain funds, which can then be used to invest in more asset classes or withdraw.

Hong Kong VATP license approved in January this year

Founded in 2012, Futu Holdings Limited is a Hong Kong-based fintech company dedicated to providing digital securities brokerage and wealth management services through technological innovation. According to its official data, as of Q4 2024, Futu has more than 34 million registered users worldwide and about 2.5 million paying users, a year-on-year increase of 39.1%. The Hong Kong market is particularly strong, with Futubull reaching more than 50% of the city's adult population. In 2024, Futu's total revenue increased by 86.8% year-over-year, and non-GAAP adjusted net profit increased by 105.4%.

Li Hua, founder and CEO of Futu Securities

As a licensed securities dealer in Hong Kong, Futu Securities holds Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) licenses issued by the Hong Kong Securities and Futures Commission (SFC), and is qualified to legally conduct securities transactions and related financial services. These licenses ensure that Futu's securities business in Hong Kong is strictly regulated and meets compliance requirements such as anti-money laundering and know-your-customer requirements. However, cryptocurrency-related services are subject to virtual asset trading platform (VATP) regulation, which requires an additional VATP license.

As early as 2021, Futu revealed its interest in the cryptocurrency market. According to reports from Caixin, Futu Holdings Vice President Robin Li Xu stated that the company had applied for digital currency-related licenses in Hong Kong, the United States, and Singapore, planning to enter the crypto trading space, although the progress was slow. Hong Kong's regulation of crypto assets has gradually opened up in recent years. In 2023, the Hong Kong Securities and Futures Commission launched the VATP license system, allowing compliant platforms to provide cryptocurrency trading services to retail investors. It is worth noting that Futu Holdings' wholly-owned subsidiary, PantherTrade, applied for the VATP license that year, and until the end of January 2025, the Hong Kong Securities and Futures Commission approved PantherTrade's VATP license.

Futu Securities has launched a cryptocurrency recharge service that allows ordinary users to recharge their accounts with Bitcoin (minimum 0.0002 BTC) and Ethereum (minimum 0.001 ETH) through personal wallets, with funds typically arriving within 1 hour; professional investors can recharge USDT, using a designated network with no fees. This feature enables Futu NiuNiu users to seamlessly manage cryptocurrencies and traditional assets on the same platform, significantly enhancing the flexibility of their investment portfolios from Hong Kong stocks, US stocks to Bitcoin and ETFs.

Futu's move is not an isolated case, but part of the global fintech platform's embrace of the cryptocurrency wave. Robinhood in the United States is a striking example. This platform, which disrupted traditional brokerages with "zero commissions," launched Bitcoin and Ethereum trading services as early as 2018 and gradually expanded to assets like Dogecoin and Litecoin. Robinhood's crypto business quickly became one of its revenue pillars, with its 2023 financial report showing that crypto trading revenue accounted for nearly 20% of its total revenue. Similarly, global investment platforms like eToro have also made cryptocurrencies a core business, attracting a large number of young investors. Futu Securities' action is clearly inspired by these pioneers, as the launch of its crypto recharge service is not only a necessary choice in market competition but also a keen response to changing user demands.

Lowering the threshold for stock trading users to buy coins

For traditional stock trading users of Futu NiuNiu, the launch of cryptocurrency recharge services is quite attractive. Firstly, it enriches the diversity of investment portfolios. Stock trading users are accustomed to investing in traditional assets such as Hong Kong stocks, US stocks, and ETFs, but cryptocurrencies, as alternative assets with high growth potential, have attracted the attention of global investors in recent years. In 2024, the price of Bitcoin once broke through $100,000, indicating strong market demand. Futu allows stock trading users to recharge BTC, ETH, and USDT through the same account, directly participating in the crypto market without the need to register an additional crypto exchange account, thus lowering the learning and operational threshold.

Secondly, Futu's crypto services provide stock trading users with a new tool to hedge market risks. The stock market and the crypto market often exhibit different volatility cycles; for example, when Bitcoin plummeted in 2021, some stock markets remained stable. Stock trading users can diversify investment risks by allocating a small amount of crypto assets, especially to seize the rising opportunities in the crypto market during traditional market downturns.

The USDT recharge function provides professional investors with a stable capital transfer station, facilitating flexible switching between the stock market and the crypto market. Compared to successful cases like Robinhood that attract young investors through crypto trading, Futu Niu Niu has a higher proportion of young and high-net-worth users among its stock trading clientele, who have a higher acceptance of cryptocurrencies. This feature from Futu is expected to further enhance platform stickiness and attract users to increase their account funds.

Diversified Investment for Cryptocurrency Traders

For "speculative trading" users enthusiastic about cryptocurrency trading, the deposit service of Futu Securities also brings certain appeal. Firstly, the Futu NiuNiu platform supports deposits in Bitcoin, Ethereum, and USDT, covering mainstream assets in the cryptocurrency market. Bitcoin and Ethereum, as the top two cryptocurrencies by market capitalization, possess high liquidity and market recognition; USDT, as a stablecoin, provides value anchoring for trading, reducing volatility risk.

Secondly, Futu's brand endorsement and compliance provide a higher level of security for cryptocurrency traders. Compared to the asset losses experienced by some cryptocurrency exchanges due to technical vulnerabilities or hacker attacks, Futu, as a licensed broker, significantly reduces financial risks by relying on a mature trading system and strict regulatory requirements. For example, the U.S. platform Robinhood attracts a large number of users through cryptocurrency trading, with compliance and technical stability being key factors. Futu's similar positioning is expected to replicate this success and attract cryptocurrency traders who are sensitive to security and transparency.

In addition, Futu NiuNiu's one-stop platform allows cryptocurrency users to quickly convert between crypto assets and traditional financial assets. Users can manage Bitcoin and assets such as Hong Kong stocks and US stocks within the same account, eliminating the hassle of cross-platform transfers and improving fund utilization efficiency. This seamless connection is particularly attractive to cryptocurrency users pursuing diversification in their investments. Some cryptocurrency users are also interested in opportunities in the US and Hong Kong stock markets. When the cycles of the cryptocurrency and stock markets are misaligned, with both experiencing highs and lows at different times, it also facilitates investors in flexibly seizing fluctuations and capturing dual opportunities in both the crypto and stock markets.

However, cryptocurrency traders should note that Futu's crypto services are currently mainly aimed at users in Hong Kong and overseas, while users in mainland China are unable to participate due to regulatory restrictions. Additionally, Futu has set a threshold for professional investors for USDT deposits (requiring proof of assets of 8 million HKD), which has led some in the market to jokingly say that it "blocks retail investors." This extremely high threshold makes it nearly impossible for small retail investors to participate in trading on the platform, and the current number of participants in deposits remains unknown.

Summary

For Futu itself, this move not only meets the needs of existing users but may also attract new users, further expanding its market share. From an industry perspective, Futu's entry should not be underestimated. Crypto assets are accelerating into the mainstream, and the compliant operation of its traditional financial platform injects transparency into the already trust-deficient crypto industry. Finally, Futu's actions may trigger a chain reaction. Local Hong Kong brokerage firms like Victory Securities have already supported crypto deposits, and Futu's participation will encourage more traditional financial institutions to follow suit, accelerating industry consolidation.