Saturday, July 20, 2024
HomeBTCHong Kong retail investors restricted from purchasing Bitcoin spot ETFs

Hong Kong retail investors restricted from purchasing Bitcoin spot ETFs

On Friday, Hong Kong’s financial authorities issued new guidelines restricting retail investors’ access to financial instruments that invest directly in digital assets. The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) issued a joint circular. This circular restricts sales of non-derivative products such as crypto spot exchange-traded funds (ETFs), including offshore goods, to professional investors only.

According to authorities, crypto spot markets are “completely unregulated at the moment” and involve high risks. Investors who have less experience and understanding may lose their capital. Retail investors may still be given derivatives-based products traded on SFC-approved exchanges, such as Bitcoin futures ETFs, which are considered safe and risk-free.

Hong Kong’s concern for retail investor risks has been echoed overseas, including in the U.S., where a Bitcoin spot ETF is yet to be approved, while Bitcoin futures ETFs hit the market last year. The SFC and the HKMA have allowed intermediaries a six-month grace period to comply with the new rules.

Who are the professional investors in Hong Kong?

  • An individual with a portfolio worth at least HKD 8 million.
  • A trust company with total assets of at least HKD 40 million that have been placed under one or more trusts for which it functions as a trustee.
Do you think spot crypto ETFs are only for professional investors? Comment below.

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Jeewan Singh
Jeewan Singh
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.


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