Hong Kong Mulls to Approve Spot Crypto ETFs

<p dir="ltr">Hong Kong’s financial market regulator is evaluating the prospects of allowing retail investors access to spot crypto exchange-traded funds (ETFs), Julia Leung, the CEO of the Securities and Futures Commission, revealed.</p><p dir="ltr">“We welcome proposals using innovative technology that boosts efficiency and customer experience,” said Leung, who took over the office on January 1, 2023. “We’re happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset.”</p><p dir="ltr">Crypto ETFs in Hong Kong</p><p dir="ltr">In a manner reminiscent of the United States, Hong Kong currently allows the trading of crypto ETFs based on futures. Presently, Hong Kong boasts three such funds on its market: the Samsung Bitcoin Futures Active, CSOP Bitcoin Futures, and CSOP Ether Futures ETFs, with a combined asset value of approximately $65 million. This figure may appear rather modest when compared with the vast scope of the overall market.</p><p dir="ltr"><a href="https://www.financemagnates.com/cryptocurrency/sec-reportedly-nearing-approval-of-ishares-bitcoin-etf/">Spot crypto ETFs</a> are expected to push retail demand for the asset class. The availability of such ETFs on public exchanges will eliminate the need for having dedicated crypto exchange accounts.</p><p dir="ltr">In the US, the crypto industry and a significant section of the mainstream financial services players have been publishing for the approval of spot Bitcoin ETFs for years. Still, the <a href="https://www.financemagnates.com/terms/s/securities-and-exchange-commission-sec/">Securities and Exchange Commission</a> is reluctant to approve one. Among the applicants for Bitcoin ETFs include <a href="https://www.financemagnates.com/cryptocurrency/is-blackrocks-bitcoin-etf-just-the-beginning/">Blackrock</a>, which is the largest asset manager with an asset under management of about 9.5 trillion.</p><p dir="ltr">Crypto Rules in Hong Kong</p><p dir="ltr">Hong Kong is regarded as one of Asia's financial hubs. Additionally, the Special Administrative Region of China rolled out a <a href="https://www.financemagnates.com/cryptocurrency/hong-kongs-new-crypto-licensing-regime-a-boon-or-bane-for-investors/">dedicated virtual-asset regulatory framework</a> last June. The regulations are focused on bringing investor protection to the industry and also lure crypto companies with licensing provisions.</p><p dir="ltr">Despite Hong Kong’s attempt to protect the crypto investors, the jurisdiction witnessed its largest case of financial fraud recently, as the authorities alleged that <a href="https://www.financemagnates.com/cryptocurrency/crypto-exchange-jpex-halts-trading-hk-police-arrest-an-influencer/">JPEX, a crypto exchange</a>, had duped about 2,600 local investors of HK$1.6 billion ($204 million).</p><p dir="ltr">“The incident underscores the requirement for a robust, comprehensive regulatory framework,” Leung said, adding that the regulator has <a href="https://www.financemagnates.com/cryptocurrency/in-light-of-public-demand-hong-kong-to-disclose-names-crypto-license-applicants/">enhanced transparency</a> to avoid such incidents in the future.</p>

This article was written by Arnab Shome at www.financemagnates.com.