Hong Kong regulator approves first batch of spot ETFs based on BTC and ETH

What’s new? The Hong Kong Securities and Futures Commission (SFC) has approved the first batch of spot exchange-traded funds (ETFs) based on bitcoin and Ethereum. Applications for the launch of such products were opened at the end of December last year. It is noteworthy that in the US ETH ETFs are still not admitted to the market, although trading in bitcoin fund shares began on January 11 this year.

Material by The Block

What else is known? For example, the Hong Kong-based unit of the Chinese asset manager China Asset Management has received in-principle approval from the SFC to provide retail asset management services related to crypto funds. The company plans to issue spot ETFs based on BTC and ETH in partnership with OSL and BOCI International. OSL will act as China Asset Management’s first trading and sub-custodial partner.

The SFC made a similar ruling for two crypto funds of Hong Kong-based Harvest Global Investments, which will also be issued jointly with OSL. As well as two ETFs of the Hong Kong unit of China’s Bosera Asset Management, whose partner will be the investment arm of the operator of the city’s first licensed crypto exchange, HashKey, HashKey Capital.

Bosera representatives emphasized that the approval of spot crypto funds will strengthen Hong Kong’s status as an international crypto hub.

During 2023, the city’s authorities took a number of measures aimed at attracting cryptocurrency companies and developed a different regulation of the industry from mainland China, where mining and transactions with cryptocurrencies are prohibited. One such measure was opening up access to crypto exchanges to retail investors.

Last June, Hong Kong’s largest bank, HSBC, allowed clients to trade shares of overseas ETFs listed on Hong Kong’s HKEX exchange. At the same time, local rating agency HKVAC launched the HKVAC Cryptocurrency Large Market Cap Index of virtual assets with a basket of 30 coins.

Late last year, SFC chief Julia Leung said the agency welcomes innovative products and technologies that improve the efficiency and quality of customer service, including crypto funds.