UBS Opens Crypto ETF Trading For Wealthy Clients In Hong Kong

Swiss investment banking company UBS Group AG has joined other banks, like HSBC Holdings Plc, in permitting Hong Kong-based clients to trade crypto-linked exchange-traded funds (ETFs). This decision aligns with Hong Kong’s efforts to become a hub for digital assets.

Wealthy clients will be given access to three crypto-futures ETFs on UBS’s Hong Kong platform starting November 10, Bloomberg reported, citing anonymous sources. The three available ETFs — CSOP Bitcoin Futures, Samsung Bitcoin Futures Active, and CSOP Ether Futures ETFs — are authorized by Hong Kong’s Securities and Futures Commission (SFC). Together, the three products boast assets worth approximately $72 million. Besides investment opportunities, UBS is providing educational materials to help clients understand the associated risks.

In a Bloomberg interview published earlier this week, SFC Chief Executive Officer Julia Leung said the regulator is considering opening up spot crypto exchange-traded funds (ETFs) to retail investors. The commission would permit such investments if they follow the region’s regulations. According to Leung, Hong Kong is open to innovative technology proposals that enhance efficiency and customer experience.

Further, she added:

“We’re happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset.”

Hong Kong’s new rules for digital assets, in effect since June 1, aim to protect investors and support the growth of the crypto market. The SFC allows retail investors to trade major crypto tokens on licensed exchanges. Meanwhile, the SFC has granted such licenses to OSL and HashKey.

JPEX Scandal Heightened Scrutiny In Hong Kong’s Crypto Market

Despite Hong Kong’s attempts to be a progressive financial hub, recent setbacks, like the collapse of the unlicensed JPEX exchange, have prompted heightened scrutiny. In response, Hong Kong established a joint SFC-Police task force to monitor suspicious moves within the crypto space.

Furthermore, global financial institutions are showing signs of cautious engagement after the 2022 market turmoil, including the failure of FTX. DBS Group Holdings Ltd. intends to acquire a license to offer crypto services to Hong Kong customers. Hong Kong’s largest virtual bank, ZA Bank Limited, also plans to introduce token-to-fiat currency conversions through licensed platforms. Earlier this month, SEBA Bank secured a license for its unit to offer crypto services in the region.