- Hong Kong ETF issuers are not concerned about the potential US classification of Ethereum as a security.
- The Hong Kong Securities Regulatory Commission has its own procedures to determine if crypto assets are securities, independent of the US stance.
- Hong Kong has already clearly defined that Ethereum is not a security and can be provided to retail investors.
Hong Kong-based exchange-traded fund (ETF) issuers are not concerned about potential regulatory crackdowns in the United States that could classify Ethereum (ETH) as a security. This comes as Hong Kong readies itself to launch the world’s first spot ETH ETF.
Why Hong Kong is Unfazed
According to Wayne Huang, head of custody firm OSL Digital Securities, Hong Kong regulators already have clear definitions around what constitutes a security. Huang emphasized that the city has established its own procedures for evaluating crypto assets and allowing retail investor access.
He added that Hong Kong will not be swayed by “different opinions between various departments in the United States or ultimately their own unilateral definition.”
First ETH Spot ETF
Huang explained why Hong Kong will be launching the first spot ETH ETF globally, saying that Hong Kong has already clearly defined Ethereum as not being a security.
This contrasts with the US, where Huang said “regulation of cryptocurrency…has multiple departments speaking out at the same time or trying to regulate it.”
SEC Investigation
Huang’s comments come as the US Securities and Exchange Commission investigates whether Ethereum should be classified as a security. This has cast doubt around the prospects for a US-based spot ETH ETF.
Conclusion
The launch of ETH and crypto ETFs in Hong Kong represents a significant development, offering institutional investor access amid an unsettled regulatory environment in the US. It highlights Hong Kong’s distinct approach in already establishing clear frameworks for these assets.
