Hong Kong’s financial regulators released new guidelines on Friday that restrict retail investor access to financial products that invest directly in digital assets.

Fast facts

  • In a joint circular released by the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC), the regulators placed sales restrictions on non-derivative products such as crypto spot exchange-traded funds (ETFs), including overseas products, to be offered to professional investors only.
  • Authorities said that crypto spot markets are “largely unregulated at present” and may present higher risks to investors with less experience and knowledge.
  • Derivatives-based products offered in exchanges specified by the SFC, such as Bitcoin futures ETFs, may still be offered to retail investors. 
  • Hong Kong’s concern for retail investor risks has been echoed overseas, including the U.S., where a Bitcoin spot ETF is yet to be approved, while Bitcoin futures ETFs hit the market last year.
  • The SFC and the HKMA have given intermediaries a six-month transition period to comply with the new requirements.