Retail investors in Hong Kong are barred from purchasing Bitcoin spot ETFs

On Friday, Hong Kong’s financial authorities issued new rules limiting individual investors’ access to financial instruments that invest directly in digital assets.

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) jointly issued a circular restricting sales of non-derivative products, including crypto spot exchange-traded funds (ETFs), to professional investors only.

In Hong Kong, a professional investor is defined as a person who has a portfolio worth at least HKD$8 million, or around US$1 million.

Authorities said that cryptocurrency spot markets are now “completely unregulated” and may pose greater dangers to investors with less expertise and information.

Retail investors may still purchase derivatives-based products provided on SFC-approved exchanges, such as Bitcoin futures ETFs.

Hong Kong’s worry over retail investor risks has been mirrored by other jurisdictions, including the United States, where a Bitcoin spot ETF has yet to be authorised, despite the fact that Bitcoin futures ETFs began trading last year.

The SFC and HKMA have provided a six-month transition time for intermediaries to comply with the new regulations.

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