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BusinessBanking & Finance

Tiger Brokers, Futu plan to launch cryptocurrency trading services outside China, taking on Robinhood, eToro

  • Beijing-based Tiger Brokers and Shenzhen-based Futu have unveiled plans to expand into digital currency trading
  • Targeting only offshore clients, the move has come amid Beijing’s renewed crackdown on bitcoin and other cryptocurrencies

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The Chinese government has been cracking down hard on cryptocurrency trading. Photo: Reuters
Georgina Lee
Chinese online brokerages Tiger Brokers and Futu are planning to expand into cryptocurrency trading, joining western peers such as Robinhood in the US, and Israel’s eToro in attempts to turn volatile digital coins into mainstream assets.
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The Nasdaq-listed brokers have unveiled their new business plans during first-quarter earnings calls in the past month, competing and segregating for a growing pool of young and mobile traders outside mainland China.

The move has come amid China’s crackdown on onshore trading and mining of the digital currencies because of financial and environmental risks. Cryptocurrencies, which saw extreme price swings in May, have divided Wall Street, with Goldman setting up a dedicated trading desk, JPMorgan Chase reportedly offering a bitcoin fund for wealthy clients and Bank of America so far keeping its distance.
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Beijing’s war on cryptocurrency trading and mining has sent bitcoin plunging 40 per cent over the past month. The management teams at both Futu and Tiger Brokers were quick to point out that the new bitcoin trading services would only target customers that are not based in mainland China.

“We notice cryptocurrencies such as bitcoin have become more acceptable by mainstream investors since last year and are emerging as an asset class. Tiger’s mission is to make investing more efficient and enjoyable for investors,” said Wu Tianhua, chief executive of Tiger Brokers, during the call held last Tuesday.

Wu said Beijing-based Tiger Brokers, which is backed by smartphone giant Xiaomi, is “not going to offer such a service to Chinese nationals”, adding that it is in the process of applying for the “relevant licences” governing crypto trading, without specifying from which regulators.
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Tiger Brokers reported first-quarter net profit of US$21.1 million, compared to a net loss of about US$200,000 during the same period a year ago. It offers trading services for stocks listed on the US, Hong Kong, Australia and Singapore stock exchanges. It has 376,000 customers with deposits ready to trade.

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