Wednesday, October 5, 2022

Huobi Tech plans to Launch Crypto ETF for Retail Investors in Hong Kong

Huobi Tech is set to broaden its Exchange-Traded Fund (ETF) service with the launch of a new service product that tracks cryptocurrencies for retail investors following Hong Kong’s recent guidelines for the sale of digital assets.

The asset manager has submitted its application to the Securities and Futures Commission (SFC) of Hong Kong and plans to design the product in such a way that only investors with assets less than HK$8 million ($1 million), can access it, according to sources familiar with the matter.

An Exchange-traded Fund is a kind of investment fund that trades on exchanges, generally tracking a specific index. It is an important avenue to pull investment into the crypto sphere as it affords investors exposure to the space without directly purchasing any virtual assets.

The ETF plans by the fund management firm are hinged on hopes that the current relaxation of the restrictions placed on retail investors will be made permanent and will also be allowed to venture into digital assets even though it’s through regulated fund products.

This is in spite of a proposed bill seeking to ban retailers from directly dealing with Bitcoin (BTC) and other digital currencies – a move if approved will be disastrous for crypto adoption in Hong Kong.

Hong Kong, through the SFC and Hong Kong Monetary Authority (HKMA), had in January released a joint circular that offered limited exceptions for retail investors to participate in the crypto-backed EFT market which was formally on a “professionals only” rule.

Virtual asset-based products are grouped into two, complex and non-complex according to the joint circular. The non-complex virtual asset-based products will be permitted for retail traders, while the complex virtual asset products are exclusive to professionals.

Huobi is one of the four fund managers authorized by the SFC to offer crypto-related services for professional traders. The others are Axion Global Asset Management, Venture Smart Asia, and Fore Elite Capital Management. Friendlier laws like this to govern this nascent industry will elevate Hong Kong’s status in the broader crypto ecosystem.

Joyce Onose
A Blockchain enthusiast and growing writer in the space with an understanding of the importance in creating quality content for readers in the industry. Also, keen on using her skills in improving Blockchain journalism.

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