As the US SEC deliberates on the approval of 13 Bitcoin spot ETFs, there’s significant activity in Hong Kong, where the Chief Operating Officer of HashKey Group, Livio Weng, discloses that approximately ten fund companies are gearing up to introduce Virtual Asset Spot Exchange-Traded Funds. According to Weng, seven or eight of these companies are well into the advanced stages of preparing for the launch of spot crypto ETFs, marking a notable development in the region’s push to lead Asia as the pioneer market permitting the listing of virtual asset spot ETFs.
This initiative comes in response to a circular issued in December 2023 by the Hong Kong Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA). This circular announced their willingness to consider applications for the authorization of virtual asset spot ETFs, reflecting a pivotal shift in the regulatory landscape.
This change signifies a departure from the 2018 regulatory approach, when the SFC initially adopted a stance that restricted the crypto market to “professional-investors only.” Hong Kong’s perspective on digital assets has undergone a noteworthy transformation, with regulators now relaxing restrictions and expanding the scope for investor participation. In a significant move in October, the SFC updated its rule book to enable a broader range of investors to participate in spot-crypto and ETF investments.
Regulators Working to Allow Retail Investors to Buy Spot ETFs
SFC Chief Executive Officer Julia Leung has reinforced this evolving trend, confirming that the regulator is moving forward with the prospect of enabling retail investors to purchase spot crypto ETFs. Leung emphasized the regulatory body’s receptivity to innovative technologies aimed at improving efficiency and enhancing customer experience, as long as the associated risks are properly addressed.
In a joint statement, the SFC and HKMA underscored the swift transformation of the virtual asset landscape, as it integrates further into mainstream finance. The SFC explicitly communicated its readiness to entertain applications for the authorization of other funds with exposure to virtual assets, encompassing VA Spot ETFs. This signals a continued commitment to adapt regulatory frameworks to the dynamic developments within the digital asset space.
