Hong Kong Lists ETH ETFs Despite US Security Classification

Hong Kong lists Ethereum (ETH) ETFs, and issuers shrug off potential US security labels for Ethereum, allowing investors broader crypto access.

Exchange-traded fund issuers in Hong Kong remain unfazed by the crypto crackdown in the United States, even with regulators potentially classifying Ether (ETH) similar to a quantitative analyst; it functions as a security.  

Addressing the media on April 29th, ahead of the debut of spot crypto ETFs in Hong Kong, Zhu Haokang, the CEO of China Asset Management, and Wayne Huang, the CEO of OSL Digital Securities, provided insights into the upcoming institutional investment products. 

One of the more interesting responses was to a question about the world’s first spot Ether ETF and its potential impact in Hong Kong, given the United States’ classification of it as a security. Huang replied: 

“Probably not, because whether the United States defines Ethereum as a security does not affect the independent decision-making of the Hong Kong Securities Regulatory Commission.”

Wayne Huang, OSL Digital Securities head

He mentioned that the Hong Kong Securities Regulatory Commission has procedures for assessing whether specific crypto assets qualify as securities and whether retail investors can trade them. 

He continued, “It won’t be influenced by differing opinions among different departments in the United States or by their independent definition.” 

He highlighted why Hong Kong is set to become the global pioneer in launching an Ethereum spot ETF, as opposed to the United States. 

“The regulation of cryptocurrency in the United States has multiple departments speaking out at the same time, or trying to regulate it.”

“Hong Kong has already provided a clear definition of Ethereum,” he stated, emphasizing that “Ethereum is not considered a security.” According to him, this is one of the two assets, alongside Bitcoin, that can be offered to retail investors. 

The U.S. Securities and Exchange Commission is investigating the Ethereum Foundation to assess its security classification. 

China Asset Management, Bosera Asset Management, and Harvest Global Investments have recently introduced crypto ETFs through their Hong Kong subsidiaries on the Hong Kong Stock Exchange. These ETFs are listed under the tickers CAM, BOS, and HGI. 

OSL Digital Securities was selected as the inaugural virtual asset trading and sub-custodian partner by China Asset Management (Hong Kong) on April 15th. 

China Asset Management is a state-owned bank established in 1998 and headquartered in Beijing. It is also among the most prominent fund families in China.