Executive Summary

Boyaa Interactive (00434.HK) announced a strategic partnership with New Huo Technology Holdings Limited in September 2024 to explore Web3 ecosystem business cooperation under a compliant framework, signaling increased institutional interest in regulated blockchain ventures.

The Event in Detail

Boyaa Interactive, a company committed to building a leading Web3 game ecosystem, has established a strategic partnership with New Huo Technology Holdings Limited. This collaboration, announced in September 2024, is designed to further the development of a Web3 ecosystem underpinned by a robust compliance framework. New Huo Technology, identified as Hong Kong's first listed digital asset management platform, will provide Boyaa Interactive with digital asset compliance management plans and specialized Web3 technical solutions. The board of Boyaa Interactive views this partnership as crucial support for its strategic Web3 transformation, enabling the company to leverage New Huo's expertise for business development within the evolving Web3 sector.

Financial Mechanics and Strategic Intent

Boyaa Interactive's pivot towards Web3 began in 2023, with subsequent investments in several Web3 industry companies and funds, including Pacific Waterdrip Digital Asset Fund SP I, Catcher Data Limited, Awakening Ventures Limited Partnership, UTXO Bitcoin Ecosystem Offshore Fund 1 LP, and BounceBit Limited in 2024. A notable investment in MTT ESports Limited in September 2024 included 100 Bitcoins and 4,180,749 USDT in equity and tokens, directed towards Web3 infrastructure and game development. As of June 30, 2025, the Group's holdings of Web3 strategic assets have generated a profit return exceeding US$200 million.

The company intends to allocate approximately 90% of the net proceeds from a recent share placing to acquire Bitcoin, with the remaining 10% designated for operational expenses. Boyaa's board considers cryptocurrencies, particularly Bitcoin, as essential strategic resources in the Web3 industry, believing that early investment and expansion of reserves will enhance competitive advantage. The company views crypto-assets such as Bitcoin and Ethereum as foundational for both Web3 games and infrastructure, with current Bitcoin reserves considered insufficient for future strategic development, indicating a continued acquisition roadmap. The proceeds from the placing are expected to be deployed by the end of 2025, facilitating Web3 game development and marketing, infrastructure construction, ecosystem building, project investment, and strategic cooperation in the Web3 sector.

Market Implications

This strategic alliance between Boyaa Interactive and New Huo Technology underscores a growing trend of traditional companies seeking to enter the Web3 space through compliant and regulated pathways. The emphasis on a "compliant framework" by both entities highlights the increasing institutionalization of the Web3 sector, moving beyond speculative exchanges and meme coins towards infrastructure that enterprises and regulators can trust. This approach is consistent with broader market developments, such as the European Union's MiCA framework implemented in 2024, which has created demand for regulatory technology solutions like licensing engines and reserve reporting APIs.

The partnership also reflects the expanding demand for robust digital asset compliance management. The capital flow into compliance-oriented infrastructure supports this trend, with investments reaching $3.7 billion in 2024, a significant increase from $900 million in 2020. Transaction monitoring firms have reported substantial revenue growth, and global monitored transaction volumes expanded from $6 trillion in 2021 to $16 trillion in 2024. This indicates a clear market shift towards regulatory-native infrastructure, with compliance, custody, payments, and developer tooling becoming high-velocity categories.

Broader Context

Boyaa Interactive's internal initiatives further illustrate its comprehensive Web3 strategy, including a dedicated Web3 R&D and operations team focused on game and infrastructure development. The company is actively recruiting Web3 talent and intensifying investments in infrastructure such as smart contracts for distributed storage, self-developed game blockchains for enhanced transparency and user experience, and Web3 wallets. Specific projects include the YAAKO Wallet, which supports six blockchains with plans for broader coverage, and "Pet Land," a social dress-up game integrating Web3 technology and AI. This multi-faceted approach, combined with the strategic partnership with New Huo Technology, positions Boyaa Interactive to solidify its market position within the online game sector and contribute to the broader adoption of compliant Web3 solutions across diverse industries. The collaboration is expected to set a precedent for other traditional firms looking to navigate the complexities of digital asset regulation and enter the Web3 space securely.