The joint statement highlights that the SFC and the Central Bank have thoroughly reviewed their existing rules and policies regarding companies and intermediaries that want to participate in the cryptocurrency sector. While Hong Kong already has virtual asset futures ETFs, the SFC is now prepared to accept applications for the authorization of other funds that provide exposure to digital assets, including spot virtual asset exchange-traded funds.
In another release, the SFC specified the requirements for funds with direct investments in cryptocurrencies. These investments must involve tokens that are already available on regulated trading platforms in Hong Kong. Additionally, transactions carried out by spot funds must be conducted through licensed cryptocurrency platforms or authorized financial institutions.
Furthermore, cryptocurrencies must be stored on licensed platforms and within companies that comply with local standards for cryptocurrency custodial services. However, companies looking to apply for spot cryptocurrency ETFs must consult with the regulator if the funds invested in digital assets exceed 10% of the total fund volume.
It’s worth noting that in early December, the Hong Kong regulator issued a decree stating that any cryptocurrency companies operating in the region must obtain a license from the regulator within one year.