Hong Kong Poised for First Spot Crypto ETFs by Mid-2024

Hong Kong is set to introduce its first spot crypto exchange-traded funds (ETFs) by mid-2024, with Gary Tiu, executive director and regulatory affairs director of OSL, a licensed crypto exchange, revealing the development. Tiu expects the launch of the first ETFs before mid-year, with 5-10 companies currently conducting research. Livio Weng, COO of HashKey Group, stated that over ten fund companies are in advanced stages of preparation to launch spot ETFs, with 7 out of 8 already in the promotional phase. The regulatory environment is supportive, with the Hong Kong Securities and Futures Commission (SFC) open to applications for authorization of funds with exposure to virtual assets. Last month, the SFC introduced new regulations specifying criteria for SFC-authorized funds to directly invest in spot crypto funds. Venture Smart Financial Holdings (VSFG), an SFC-approved virtual asset manager, plans to file for an ETF with the SFC, aiming to launch it in Q1/2024 with ambitions to manage assets worth $500 million by year-end. The move follows the successful establishment of spot Bitcoin ETFs in the US, positioning Hong Kong as a potential hub for crypto ETFs. Concerns remain about market demand, given the modest assets under management by existing crypto funds in Hong Kong, but industry players express optimism. (Source: Cryptobriefing)