Hong Kong’s Securities and Futures Commission (SFC) is assessing the prospects of allowing retail investors access to spot cryptocurrency ETFs once the regulatory framework is finalized.
SFC Chair Julia Leung, who took up her role on 1 January 2023, said the regulator welcomes the use of emerging technologies as they improve efficiency and improve customer service. Therefore, the regulator may approve the launch of spot Bitcoin ETFs if the associated risks are eliminated, Leung emphasized.
Like the United States, Hong Kong allows futures ETFs linked to cryptocurrencies. Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF are currently available on the Hong Kong market. The total value of their assets is about $65 million. The SFC Chair noted that the agency is ready to take a consistent approach, regardless of the asset or investment product. Bitcoin spot ETFs are expected to drive retail investor demand for cryptocurrencies.
Hong Kong is considered one of the most developed financial centers in Asia. Previously, this administrative region of China introduced a new licensing system for virtual asset service providers. The rules are aimed at protecting cryptocurrency investors, as well as attracting companies working with digital assets.
Despite attempts by local regulators to protect crypto investors, a scandal involving the JPEX cryptocurrency exchange recently occurred in Hong Kong. The management of the site is accused of fraud and defrauding about 2,600 local investors in the amount of 1.6 billion Hong Kong dollars ($204 million). According to the SFC chairman, this incident highlights the need to create a robust regulatory framework that will help avoid similar incidents in the future.
A few days ago, Hong Kong Finance Minister Christopher Hui promised that due to the situation with the JPEX trading platform, the government would tighten regulation of cryptocurrencies in the region, but would not change its mind about developing the Web3 sector.
