Hong Kong Securities Supervision Commission: Circular to be issued today to allow licensed virtual asset trading platforms to provide pledge services

The Hong Kong Securities Supervision Commission will issue a circular today allowing licensed virtual asset trading platforms to provide pledge services, including for virtual asset spot ETFs. Pledging allows investors to lock up their virtual assets to support the blockchain network and earn returns, but due to the risks, the Securities Supervision Commission will implement additional safeguards, including requiring licensed platforms to keep the pledged virtual assets and setting a cap on the proportion of virtual asset spot ETFs that can be pledged to manage liquidity risk.
Ms Choi also said that the Hong Kong Securities Supervision Commission was expanding the range of eligible virtual asset targets. Initially, virtual asset spot ETFs focused mainly on bitcoin and ether. Now that more virtual assets are eligible for retail trading on licensed platforms, it will pave the way for the diversification of ETF products, such as a single ETF tracking a basket of virtual assets.