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

key takeaways

  • 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

Upcoming Events

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.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Unlocked by Template (7).png

Research

Union’s improvements upon Tendermint consensus through CometBLS, coupled with ZK proving through Galois, allow for a broadly scalable, cost efficient, and low latency IBC implementation that is feasibly scalable across every existing blockchain, virtual machine and runtime. The implementation offers modular crosschain interoperability without the need for trusted intermediaries.  

article-image

Kraken’s chief security officer Nick Percoco said the exchange turned the tables on a North Korean hacker

article-image

Or is it approximately the least cypherpunk thing we could do?

article-image

Over 20% of SOL-USD swap volume goes through SolFi

article-image

CEO Vlad Tenev calls expected clarity on listing crypto asset securities “a big opportunity”

article-image

Big Tech pulled US indexes back into the green Thursday, as investors waited for two more Mag 7 first-quarter reports after the bell

article-image

Charts and takeaways from Tuesday’s jobs report and Wednesday’s GDP print, as the economy digests the tariff war