Hong Kong ETF issuers remain unconcerned about potential US regulations that could classify Ethereum as a security. They are confident that the strong framework for crypto investments in Hong Kong will not be affected by regulatory changes in the US.
Ahead of the launch of new spot crypto ETFs in Hong Kong, leaders in the financial sector gathered at a press conference to demonstrate their preparedness and optimism. Zhu Haokang from China Asset Management and Wayne Huang from OSL Digital Securities were at the forefront, answering questions about these innovative investment products.
Zhu Haokang, who oversees the digital asset management and family wealth division at China Asset Management (Hong Kong), and Wayne Huang, who heads the OSL ETF and custody business, expressed confidence in the initial launch. Zhu predicted a groundbreaking start for Hong Kong’s virtual asset spot ETF, expecting it to surpass the $125 million raised by US Bitcoin spot ETF issuers earlier this year.
Huang added that the Hong Kong Stock Exchange would announce significant first-day fundraising achievements the following day, indicating that the figures had already exceeded those of their US counterparts.
Zhu highlighted the unique features of the Spot China Bitcoin ETF and Spot China Ethereum ETF compared to similar products. These ETFs allow both spot and physical subscriptions and redemptions, a feature not available in the US. They are also the only ETFs that offer counters in Hong Kong dollars, US dollars, and RMB, with options for both listed and unlisted shares.
Investor interest extends beyond the local market, attracting global attention. Zhu noted significant participation from Bitcoin miners using their holdings to directly purchase ETF shares. Investors from regions without their own ETFs, such as Singapore and the Middle East, as well as family offices across Asia and overseas, have shown keen interest due to the advantages of physical subscriptions and trading hours aligned with Asian markets.
Wayne Huang discussed the broader involvement of brokerage firms with the new ETFs. In addition to Victory Securities, Huaying Securities, and others, more brokerage firms are preparing to handle physical subscriptions, with additional firms expected to join in May.
Huang explained the strict anti-money laundering measures in place to ensure that only verified wallets can engage in transactions, potentially including wallets held by other exchanges, provided they meet OSL’s rigorous standards.
Despite potential changes in US regulations concerning Ethereum, Huang made it clear that such changes would not influence the independent standards and procedures of the Hong Kong Securities Regulatory Commission. He detailed the extensive compliance and due diligence process required to list new virtual assets, which currently only includes Bitcoin and Ethereum for retail trading in Hong Kong.
Zhu concluded the session by discussing the broader impact of cryptocurrency ETFs on market prices and liquidity. He suggested that these products could promote compliance, expand funding channels, and provide new arbitrage opportunities. He also defended the higher fees charged by China Asset Management Hong Kong, emphasizing the flexibility, complexity, and innovative nature of their ETF offerings.
