Nearly 10 hedge funds are set to launch spot crypto ETFs in Hong Kong, HashKey says

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With Hong Kong on the verge of approving spot crypto ETFs, virtually a dozen hedge funds are queuing as much as submit functions for the brand new monetary product.

In an interview with Chinese language information outlet Caixin, HashKey Group COO Livio Weng revealed that roughly a dozen hedge funds are getting ready to submit functions for the launch of spot crypto exchange-traded funds (ETFs) in Hong Kong as town is poised to turn out to be the primary market in Asia permitting the itemizing of those monetary merchandise.

Whereas the timeline for Hong Kong regulators to approve the functions stays unsure, Weng talked about that as much as eight of the hedge funds are already within the “precise development stage,” though particular particulars weren’t offered.

This improvement follows a joint round issued by the Securities and Futures Fee (SFC) and the Hong Kong Financial Authority (HKMA) in December 2023, during which the regulators acknowledged the rising curiosity in launching spot crypto ETFs. The SFC emphasised its readiness to just accept functions for the authorization of funds with publicity to cryptocurrencies, together with spot crypto ETFs.

It’s price noting that Hong Kong has already granted permission for futures crypto ETFs within the area, together with Samsung Bitcoin Futures Energetic ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF. These ETFs can be found to Hong Kong traders with portfolios exceeding $2 million by UBS’ native department.

Whereas monetary regulators in Hong Kong specific their willingness to contemplate the approval of spot crypto ETFs, their general stance on the broader crypto market seems to be cautious. In late December 2023, the Monetary Companies and the Treasury Bureau (FSTB) and the Hong Kong Financial Authority (HKMA) issued a joint assertion outlining their resolution to allow retail traders to buy stablecoins.

Regardless of this transfer, the regulators emphasised that stablecoin issuers must receive a particular HKMA license earlier than providing their companies within the area. The licensing necessities embrace complete measures equivalent to full backing of all stablecoins in circulation with reserves matching the face worth, correct segregation and custody of reserve belongings, clear disclosure practices, and common reporting.

Furthermore, stablecoin issuers looking for approval might want to set up a bodily presence in Hong Kong by opening an workplace. This workplace ought to embrace a CEO, a senior administration staff, and key personnel to make sure compliance with regulatory requirements and efficient oversight.

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