Hong Kong’s financial regulators, the SFC and the Hong Kong Monetary Authority (HKMA), have jointly announced that they are ready to accept spot crypto ETF applications. This move by the regulators follows the SFC’s previous approval for licensed crypto providers to offer cryptocurrency futures ETFs.
The SFC has updated their regulatory framework to allow investors from a wider range of backgrounds to participate in spot crypto investments and ETFs. According to the guidelines specified by the SFC, funds that wish to invest directly into spot virtual asset tokens must be readily available on SFC-licensed Virtual Asset Trading Platforms (VATPs). All transactions involving these ETFs should be conducted through SFC licensed crypto platforms or approved financial institutions.
Hong Kong is actively encouraging banks to collaborate with it and promote itself as an environment that is welcoming for crypto firms. The region has become a major player in the global crypto and blockchain sectors, and has attracted over 11% of global venture capital funding. In October 2022, the Hong Kong government is expected to introduce a crypto-licensing system for platforms trading virtual assets.
This regulatory shift is notable as it coincides globally with speculation about the possible approval of an ETF for bitcoin spot by the U.S. Securities Exchange Commission (SEC) during the first weeks of the new year.
