Today, the Chief Operating Officer of HashKey, Livio Weng, revealed that approximately ten fund companies are planning to launch virtual asset spot ETFs in Hong Kong, which has motivated the three virtual currency ETFs currently listed in Hong Kong to achieve impressive performance yesterday.
Background:
Not only spot ETFs! Hong Kong Securities and Futures Commission regulates the custody of virtual assets, requiring the separation of private keys and client platform assets in Hong Kong.
Table of Contents:
Multiple fund companies to launch virtual asset spot ETFs in Hong Kong
Three virtual currency futures ETFs surge
Regulatory requirements for virtual asset spot ETFs in Hong Kong
In December last year, Hong Kong expressed its readiness to accept authorization applications for “virtual asset spot ETFs and related funds,” apparently intending to make Hong Kong the first region in Asia to list spot ETFs.
Today, in an exclusive interview with HashKey Group’s Chief Operating Officer Livio Weng, he revealed that approximately ten fund companies are currently preparing to launch virtual asset spot ETFs in Hong Kong, with seven to eight already in the actual promotion stage. This means that Hong Kong is gradually becoming the first market in Asia to allow the listing of virtual asset spot ETFs.
As one of the only two licensed virtual asset exchanges in Hong Kong, HashKey Exchange stated that their participation in virtual asset spot ETFs mainly focuses on “virtual asset trading involved in funds” and “virtual asset custody,” the two core business areas.
Possibly influenced by this news, the three virtual currency ETFs currently listed in Hong Kong achieved impressive performances yesterday. The BTC futures ETF (3066.HK) rose by 7.07%, the ETH futures ETF (3135.HK) rose by 7.02%, and the ETH futures ETF (3068.HK) also rose by 4.15%.
These three products entered the top three on the Hong Kong ETF gainers list, surpassing other asset categories.
On December 22 last year, the Hong Kong Securities and Futures Commission issued the “Joint Circular on Intermediaries Engaging in Activities Related to Virtual Assets” and the “Circular on the SFC’s Approach to Virtual Asset Funds,” which outlined the following requirements for the regulation of virtual asset spot funds:
Issuer qualifications: Institutions issuing BTC spot ETFs need to have a good compliance record, employees with experience in managing cryptocurrency products, and hold a Type 9 license.
Permissible virtual asset categories: According to existing regulations in Hong Kong, BTC and ETH are the main cryptocurrencies allowed to be included in ETFs.
Anti-money laundering requirements: Hong Kong permits the subscription and redemption of virtual asset spot ETFs in either physical or cash mode. Under the physical redemption mode, cryptocurrency must be transferred to a licensed exchange in Hong Kong or other regulated financial institutions to comply with anti-money laundering regulations.
Cryptocurrency custody requirements: Cryptocurrencies need to be independently custodied by a third party, and the custodian institution must be a licensed exchange in Hong Kong or other compliant institutions. As for the use of cold wallets and hot wallets, the majority of virtual assets should be stored in cold wallets, while the virtual assets held in hot wallets should only be used for necessary subscription and redemption operations. Additionally, private keys must be kept in Hong Kong and measures should be taken to prevent network hacker attacks and ensure proper backup.
Investor restrictions: Currently, residents of mainland China are prohibited from purchasing virtual asset ETFs issued in Hong Kong because these products do not comply with the regulations outlined in the “Notice on Further Preventing and Dealing with Risks Associated with Speculative Trading of Virtual Assets” in mainland China.