Hong Kong Restricts Trading of Crypto ETFs to 'Professional Investors' Only - Blockworks

By  (contrib. Fatstack)
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Financial regulators in Hong Kong argue crypto spot ETFs pose considerable risks and have justified their move as protecting investors.

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Financial regulators in Hong Kong have issued new rules restricting virtual asset intermediaries from offering crypto spot exchange-traded funds (ETFs) to retail investors.

The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) said their motive is based on protecting investors due to “risks associated with investing in virtual assets,” according to a joint circular on Friday.

While that view is not entirely novel, restrictions placed on crypto intermediaries selling “complex products” to retail investors are new. Though crypto spot ETFs have been targeted, the “professional investors only” restriction is not being imposed for the distribution of futures-based crypto ETFs.

Under the country’s Securities and Futures rules, professional investors are defined as having a portfolio of no less than HKD$8 million (US$1 million).

“In the case of virtual asset futures contracts traded on a specified exchange which is a regulated futures market, trading is governed by conventional rules. . . .