UBS Allows Crypto ETF Trading for Select Hong Kong Clients

ubs-hong-kong — Source: AdobeStock / lenscap50

UBS Group AG has joined rivals such as HSBC Holdings Plc, in extending an invitation to select clients in Hong Kong to trade specific crypto-linked exchange-traded funds (ETFs).

The decision aligns with Hong Kong’s recent efforts to establish itself as a digital-asset hub, with the Securities and Futures Commission (SFC) authorizing three crypto ETFs for accessibility on UBS’s Hong Kong platform.

UBS Clients Can Trade SFC-Authorized Crypto ETFs

As of this Friday, affluent clients will have access to the Samsung Bitcoin Futures Active, CSOP Bitcoin Futures, and CSOP Ether Futures ETFs, Bloomberg reported citing a source familiar with the matter.

These offerings come with an additional educational component, allowing clients to familiarize themselves with potential risks associated with cryptocurrency investments.

UBS, however, has chosen to remain tight-lipped about the development.

This move coincides with Hong Kong’s rollout of a digital-asset regulatory framework on June 1, aimed at safeguarding investors while fostering a conducive environment for the growth of the crypto sector.

Currently, the SFC permits retail investors to trade major tokens on licensed exchanges, with an ongoing assessment regarding the inclusion of spot crypto ETFs in the regulatory purview.

JPEX Scandal Prompts Heightened Scrutiny in Hong Kong

Despite the city’s efforts to position itself as a forward-thinking financial center, recent setbacks, such as the alleged fraud and subsequent blowup of the unlicensed JPEX exchange, have prompted heightened scrutiny.

In response, Hong Kong has established a joint SFC-police task force to monitor suspicious activities within the crypto industry.

While the crypto sector is recovering from the market turmoil of 2022, with notable collapses like FTX platform’s bankruptcy, there are signs of cautious engagement by global financial institutions.

DBS Group Holdings Ltd. has expressed intentions to seek a license for offering crypto services to Hong Kong customers, while ZA Ban., Hong Kong’s largest virtual bank, plans to introduce token-to-fiat currency conversions through licensed platforms.

As reported earlier, SEBA Bank secured a license for its unit to provide crypto services in Hong Kong.

The introduction of the CSOP Bitcoin Futures and CSOP Ether Futures funds in December, touted as Asia’s first listed Bitcoin and Ether futures ETFs, has amassed a combined asset value of around $70 million, indicating a tempered interest in crypto compared to the exuberance of the pandemic-era market boom.