Hong Kong regulators ready to approve spot Bitcoin ETFs

The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority reviewed their policy regarding intermediaries in the cryptocurrency market.

In a joint circular, the authorities said that in addition to existing futures exchange-traded funds of virtual assets, they are prepared to accept applications for such spot products.

In the clarifying document, the SFC noted that crypto funds must:

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• invest only in tokens traded in Hong Kong on regulated platforms;

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• conduct all transactions through licensed intermediaries in the market;

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• use only custodians approved by regulators.

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Redemption of the crypto-ETF can be effected in cash or in kind.

Preliminary consultations with the SFC will be required to launch funds with a 10% cryptocurrency component in total net asset value.

Meanwhile in the United States, the SEC is reviewing more than a dozen applications to launch spot Bitcoin ETFs. Among the contenders are listed BlackRock, VanEck, Invesco, Fidelity Investments and WisdomTree.

In recent months a number of companies have been engaged in active consultations with the regulator and revising documents to meet the requirements. Industry experts anticipate that the agency will broadly approve the products around January 8–10.

Earlier, former BitMEX chief Arthur Hayes suggested that the emergence of spot Bitcoin ETFs in Hong Kong would spur a favorable SEC decision in light of the US-China economic confrontation.