Huobi Technology plans to launch ETFs that track cryptocurrencies for retail investors in Hong Kong. The company has reportedly submitted its proposal to Hong Kong’s Securities and Futures Commission (SFC) and waiting for a nod.
Huobi’s ETF Plans
It intends to structure its ETFs such that they are “accessible to retail investors with less than HK$8 million (US$1 million) in assets,” said a report in the South China Morning Post. The existing law allows crypto exchanges and firms to provide digital assets services to only professionals investors.
The media report quoted a top company official saying that the crypto ETF for retail investors will be regulated by Hong Kong law, and all the trading and redemption will be done in the city-state to provide “better protection to investors.”
The Hong Kong-listed fund manager “will keep close and positive communications” with the financial sector regulators, including the SFC, to obtain necessary licenses and approvals.
Huobi Tech is one of the four fund managers in Hong Kong that the SFC has authorized to offer crypto-related products to professionals investors. The company expects that the agency might relax the professionals-only provision and allow it to come out with its planned crypto-tracking ETFs for retail investors.
Its optimism for easing of professionals-only stance comes in the wake of the SFC relaxing its guidelines for the sale of some virtual products. They were introduced by the Joint Circular on Intermediaries’ Virtual Asset-related Activities in January this year.
However, an amendment bill is under consideration that prohibits retailers from directly trading in BTC and other digital coins.
Crypto ETFs in Other Countries
Meanwhile, the largest bitcoin ETF in the Canadian market, Purpose Bitcoin ETF, has increased its bitcoin holding to 36,000, a 23% increase YTD and a new high. Launched in February 2021, Purpose Bitcoin ETF is the world’s first spot bitcoin ETF, and it saw its assets under management (AUM) grow to $1 billion within one month of its launch.
The U.S. Securities and Exchange Commission (SEC) has not allowed a spot crypto ETF yet. However, it permitted ProShares Bitcoin Strategy ETF in October last year, which went on to amass $1.1 billion in AUM within two days of trading. In a recent move, The SEC rejected bitcoin ETF proposals by Global X and NYDIG.