Hong Kong considers allowing retail access to spot crypto ETFs: report

Quick Take

The Securities and Futures Commission is assessing such crypto ETFs as the city aims to establish itself as a crypto hub, Bloomberg reported.

Hong Kong is considering allowing retail access to spot exchange-traded funds (ETFs) directly investing in cryptocurrency.

Julia Leung, chief executive officer of the Securities and Futures Commission, said in an interview with Bloomberg that the regulator is evaluating such retail investment products as it welcomes “proposals using innovative technology that boosts efficiency and customer experience.”

“We’re happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset,” Leung added.

Updated guidance

Leung’s comment comes after the SFC last month updated its guidance on virtual asset-related activities for intermediaries, broadening the investor range for crypto ETF engagement. The regulator noted in a circular that it requires intermediaries to assess their clients with a knowledge test for virtual assets before they can proceed with a transaction. Institutional professional investors and qualified corporate professional investors are exempt from this test.

Currently, Hong Kong has listed three futures-based crypto ETFs — Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF.

In June, the city officially started its crypto licensing regime for virtual asset trading platforms, allowing licensed exchanges to offer retail trading services. The regulator has granted such licenses to HashKey and OSL.