FTFT and S1Quant Forge Alliance for Regulated Crypto Asset Management

NEW YORK, NY – January 05, 2026 – In a significant move to merge the worlds of traditional finance and the burgeoning crypto economy, Future FinTech Group Inc. (NASDAQ: FTFT) has announced a strategic partnership aimed at what it calls a 'new blue ocean' of compliant cryptocurrency asset management. The agreement, signed on December 29, 2025, unites its Hong Kong-based subsidiary, FTFT International Securities and Futures Limited, with the high-performance quantitative trading firm S1Quant.

The collaboration, formalized through a Letter of Intent, seeks to fuse S1Quant's algorithmic trading prowess with FTFT Securities' established regulatory standing. The stated goal is to develop and promote a new class of professional, compliant cryptocurrency investment products, specifically targeting the cautious but capital-rich demographic of institutional and high-net-worth investors.

The Regulatory Bridge: Hong Kong's New Frontier

At the heart of this venture is the unique regulatory positioning of FTFT Securities. Founded in 2009, the firm is licensed by the Hong Kong Securities and Futures Commission (SFC), holding Type 1 (Securities Trading), Type 2 (Futures Contract Trading), and Type 4 (Providing Advice on Securities) licenses. This foundation in one of Asia's premier financial hubs is critical as Hong Kong aggressively pursues its ambition to become a leading global virtual asset center.

Hong Kong's regulators have been methodically building a comprehensive framework for virtual assets, moving to license virtual asset trading platforms (VATPs) and providing guidance for fund managers investing in the space. This clear, albeit strict, regulatory environment is designed to attract reputable players and foster market integrity. The FTFT-S1Quant partnership appears custom-built to operate within this framework, leveraging existing licenses to lend an air of legitimacy and security that the crypto market has often lacked.

Hu Li, CEO of FTFT, emphasized this point in the announcement, stating, “Against the background of the accelerated evolution of the crypto economy, cryptocurrency asset management has become an important growth component in the financial industry, but we believe that compliance and risk control have always been the prerequisite for business development.” This sentiment underscores the strategy: to build products that not only perform but also meet the stringent due diligence requirements of sophisticated investors.

The Quant Edge: Marrying Algorithms with Compliance

On the other side of the partnership is S1Quant, a crypto-native quantitative firm established in 2018. The firm boasts a core team of quantitative Ph.D.s from Tsinghua Yaoban's prestigious computer science program and veterans from global tech giants. S1Quant reports an impressive, if self-verified, track record of achieving stable returns for seven consecutive years, claiming its overall performance has consistently outpaced holding Bitcoin.

This claim is particularly noteworthy given the extreme volatility of the crypto market during that period. Bitcoin itself experienced a 73% crash in 2018, the year of S1Quant's founding, but also saw massive bull runs in subsequent years. While many crypto funds have struggled to consistently beat the benchmark, quantitative strategies have shown promise. In 2025, for example, industry reports indicated that AI-enhanced algorithmic trading helped quantitative crypto funds lead the sector with average returns of 48%. S1Quant's proprietary data platform, which tracks over fifty trading factors in real-time, is the engine it believes can navigate this volatility and generate superior risk-adjusted returns.

Krystal Wang, Co-Founder of S1Quant, highlighted the symbiotic nature of the deal. “The core competitiveness of cryptocurrency asset management lies in its technical depth and compliance. FTFT Securities' compliance experience, securities licensing, and service system in the traditional financial field perfectly complements S1Quant's quantitative technology, strategy research and development over the past seven years.” The partnership aims to wrap S1Quant’s high-tech trading engine within FTFT's traditional compliance shell, creating what Wang calls “an important attempt to integrate cryptocurrency assets with traditional finance.”

Navigating a Crowded Ocean of Opportunity

While the partners describe the market for compliant crypto products as a 'blue ocean,' they are not sailing in entirely empty waters. Major traditional finance players like BlackRock and Fidelity have already made significant inroads, primarily through spot Bitcoin ETFs, which provide regulated exposure to the asset. Meanwhile, crypto-native giants and a host of specialized crypto hedge funds are also professionalizing their operations and seeking licenses in jurisdictions like Hong Kong to attract institutional capital.

The competitive advantage for the FTFT-S1Quant alliance lies in its integrated model. Rather than simply offering passive exposure, it plans to provide actively managed quantitative strategies within a fully regulated framework. This combination of active alpha generation and stringent compliance is designed to appeal to family offices, wealth managers, and institutional funds looking for more sophisticated and secure entry points into the digital asset class. The collaboration will focus on three key areas: creating compliant crypto asset management products, innovating new service models for elite investors, and coordinating technical and data resources to enhance market competitiveness.

A Strategic Pivot Amid Market Headwinds

For parent company Future FinTech Group, this venture is more than just a new product line; it represents a significant strategic pivot. The company's stock (FTFT) has faced considerable pressure, trading near its 52-week low at the start of 2026. Despite posting impressive revenue growth, the firm has struggled with profitability. This move into the high-growth, high-margin field of crypto asset management appears to be a calculated effort to revitalize its business model and unlock new revenue streams.

This is not FTFT's first foray into the world of digital assets. In late 2025, the company announced a strategic cooperation to develop a Real-World Asset (RWA) tokenization platform, signaling a broader commitment to a Web3-oriented future. The S1Quant partnership solidifies this direction, positioning FTFT to capitalize on the institutionalization of crypto. By leveraging its existing licenses and pairing with a technology leader, the company is betting that the future of finance lies at the intersection of innovation and regulation.

Mr. Li concluded his remarks by noting the venture is expected to “unlock new, technology-driven profit opportunities while maintaining the trusted safeguards of traditional finance.” The success of this partnership will serve as a crucial test case, not only for Future FinTech's strategic turnaround but for the broader thesis that the wild frontier of cryptocurrency can be successfully and profitably integrated into the established global financial system.