Hong Kong SFC Limits Authorized Virtual Asset Funds to Invest in Tokens on Licensed VATPs
In Brief
SFC-authorized virtual asset funds are restricted to making direct or indirect investments in virtual asset tokens exclusively through licensed virtual asset trading platforms.
The Hong Kong Securities and Futures Commission (SFC) issued the updated “Joint Circular on Virtual Asset-related Activities of Intermediaries,” stating that virtual asset funds authorized by the SFC are limited to investing directly or indirectly in virtual asset tokens (VA tokens) on licensed virtual asset trading platforms (VATP).
Fund companies are required to maintain a solid compliance record and have at least one qualified staff member with relevant experience in virtual asset or related product management.
Spot virtual asset exchange-traded funds (VA spot ETFs), approved by the SFC, allow subscription and redemption in both physical and cash forms. For ETFs investing in spot virtual assets, major shareholders must be SFC-licensed corporations or registered institutions complying with additional terms and conditions set by the licensing authority.
Hong Kong Welcomes ETFs Applications
Last week, the SFC and Hong Kong Monetary Authority (HKMA) jointly announced their intention to begin accepting applications for the authorization of cryptocurrency ETFs and VA spot ETFs. The SFC also detailed the requirements for funds to directly invest in the same spot VA tokens accessible to the Hong Kong public for trading on SFC-licensed VATPs.
Hong Kong maintains its position as a leading hub for digital assets in the Asia-Pacific region, with regulators adopting a progressive stance toward cryptocurrencies.
The city has listed various futures-based cryptocurrency ETFs, including Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF.
The updated guidelines issued by SFC highlight Hong Kong’s progressive regulatory stance on virtual assets. As the SFC and HKMA open doors for cryptocurrency ETFs and VA spot ETFs, Hong Kong further solidifies its role in fostering innovation within the global digital asset landscape.
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
