The Securities and Futures Commission, or SFC, in Hong Kong is reviewing the rules for virtual currency transactions, including whether individuals can invest in exchange-traded funds or ETFs.
According to the South China Morning News on Wednesday, 2018 rules restrict cryptocurrency transactions through funds or trading platforms to professional investors who can invest at least HK$8 million (US$1028624).
SFC Vice President Julia Lingfung Yi said the reassessment would be done “to see if it is fit for purpose and if modifications are needed”. Speaking at Hong Kong Fintech Week 2021, Fung Yi said that “virtual assets are moving towards traditional finance,” so the laws need to be revised.
“There are many [and] different types of virtual investment products available, and traditional offshore exchanges now offer crypto ETFs.”
Crypto ETFs are not available to Hong Kong investors, although these financial instruments can be purchased in other countries. In the US, at least 12 applications for this money have been filed with the Securities and Exchange Commission by companies that want to give speculators the opportunity to trade in cryptocurrencies. Firms wishing to make such an investment made several inquiries to the regulator in Hong Kong.
Since the SFC instituted these rules three years ago, the popularity of the digital asset has skyrocketed, with Bitcoin (BTC) doubling to $62,238 this week. The rally has sparked major investors and funds who have agreed to cryptocurrency, believing that it will soon be used for payments, while retail investors have joined the party for quick profits.
The SFC cooperates with the de facto central bank, the Hong Kong Monetary Authority or the HKMA to prepare a single prospectus after the appraisal. According to Fung Yi, the SFC and HKMA will use the principle of “one business, same risk, same rules” for banks, brokers and digital platforms that operate crypto funds.