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

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

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.

recent research

Research Report Templates (2).png

Research

We’re bullish on the PUMP token. We believe Pump.fun's brand strength, existing integrations, product roadmap, and strategic levers justify PUMP's TGE valuation, and expect the token to re-rate meaningfully higher in the months ahead.

article-image

Big blockers wasted a bitcoin fortune trying to prove a point

article-image

Coinbase’s newest acquisition includes the CEO and Head of Research from Opyn

article-image

Crypto’s highest purpose might be to make markets better by making them bigger

article-image

The non-profit’s “Project Open” seeks to let stocks trade directly on Solana

article-image

The acquisition is Pump.fun’s first, and comes just days before its planned ICO

article-image

As Trump’s tariff war reignites, everyone is assuming the dollar will continue its path lower. But the journey might be bumpy