Two Chinese asset managers to launch spot Bitcoin ETFs

Hong Kong-based arms of two major China-based asset management firms, Harvest Fund and Southern Fund, have submitted applications to launch spot bitcoin exchange-traded funds (ETFs).

Both firms, each managing assets over $200 billion, plan to introduce these investment products in the administrative region.

This comes after the U.S. regulators approved nearly a dozen applicants for spot-bitcoin ETFs . Following this development, Hong Kong regulators said they are open to consider similar applications for spot crypto ETFs.

The move comes amidst the backdrop of stringent regulations on cryptocurrency trading and mining within mainland China, which has led these asset managers to seek opportunities in Hong Kong where the regulatory environment is more favorable for cryptocurrency investments. This initiative is particularly noteworthy as it follows earlier reports of Harvest Fund’s Hong Kong subsidiary applying for a spot bitcoin ETF in January.

Hong Kong-based Venture Smart Financial Holdings is also preparing to file for a spot bitcoin ETF and expects to launch trading in the second quarter of the year. Both Venture Smart Financial and Harvest, along with RD Technologies, are part of the entities engaged in discussions with HKMA about the upcoming stablecoin sandbox.

Crypto investors in Hong Kong have been anticipating the arrival of spot bitcoin ETFs, especially since last year when the Hong Kong Monetary Authority and the Securities and Futures Commission announced they would begin accepting applications for crypto-based ETFs. The introduction of such funds is expected to provide Hong Kong investors with a regulated and straightforward means to gain exposure to bitcoin.

Elsewhere, lawmakers criticized the SFC’s reactive approach and highlighted the need for proactive measures to prevent fraudulent crypto platforms from operating unchecked. They suggested utilizing the Telecommunications Ordinance to ban suspicious sites, as is done in other developed countries, and urged the SFC and police to collaborate more closely to protect the public.

The SFC, while acknowledging many fraud incidents, defended its monitoring system, stating that time is needed for a proper investigation.