Hong Kong Restricts Trading of Crypto ETFs to ‘Professional Investors’ Only

Hong Kong’s financial regulators argue crypto spot ETFs pose considerable risks and have justified their move as protecting retail investors

article-image

Hong Kong Monetary Authority. Front entrance of Two IFC skyscraper, Hong Kong. Credit: Shutterstock

share
  • Financial regulators in Hong Kong have limited the sale of crypto spot ETFs to professional investors only
  • Professional investors in Hong Kong are defined as having a portfolio of no less than HKD$8 million (US$1 million)

Financial regulators in Hong Kong have issued new rules restricting virtual asset intermediaries from offering crypto spot exchange-traded funds (ETFs) to retail investors.

The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) said their motive is based on protecting investors due to “risks associated with investing in virtual assets,” according to a joint circular on Friday.

While that view is not entirely novel, restrictions placed on crypto intermediaries selling “complex products” to retail investors are new. Though crypto spot ETFs have been targeted, the “professional investors only” restriction is not being imposed for the distribution of futures-based crypto ETFs.

Under the country’s Securities and Futures rules, professional investors are defined as having a portfolio of no less than HKD$8 million (US$1 million).

“In the case of virtual asset futures contracts traded on a specified exchange which is a regulated futures market, trading is governed by conventional rules. Pricing transparency and potential market manipulation may be less of a concern,” the circular reads.

Crypto ETFs typically track a basket of digital asset prices, allowing an investor to diversify their crypto portfolio while forgoing the need to hold any individual assets. Canada, Brazil, parts of Europe and Dubai have already launched crypto ETFs. Futures-based crypto ETFs, on the other hand, track the price of futures contracts speculating on the future price of bitcoin.

The US approved its first bitcoin futures-based ETF back in October, signaling to the rest of the world that while it is not yet ready to greenlight a crypto spot ETF, futures-based products offer satisfactory investor protections as the ETF mediates with brokerages under the eye of regulated jurisdictions.

Hong Kong’s regulators also set out guidance on spot ETFs requiring a “knowledge test” so the intermediary can either accept or block an investor’s trade after determining whether the investor is aware of how the spot ETF product works.

“If a client does not possess such knowledge, the intermediary may only proceed if, by doing so, it would be acting in the client’s best interests and it has provided training to the client on the nature and risks of virtual assets,” the circular reads.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Pineapple begins deploying its $100 million Injective Digital Asset Treasury, staking INJ to earn yield and fund onchain mortgage ambitions

by Blockworks /
article-image

Staking levels in the ether funds will depend on protocol unstaking queue times and anticipated redemption activity, firm says

article-image

ETF inflows, miner strength, and tightening supply drive Bitcoin past its prior peak amid renewed demand for scarce assets

by Blockworks /
article-image

The Guidestar team, led by Alex Nezlobin, will join Uniswap Labs to enhance automated market maker design and smart order routing

by Blockworks /
article-image

Zac Prince spearheads Galaxy’s push into consumer banking with high-yield cash, crypto, and stock trading features

by Blockworks /