Hong Kong's Number of Crypto-Licensed Fund Managers Remains Small

Only 10 fund managers have chosen to upgrade their license since the option became available.

After the Securities and Futures Commission in Hong Kong offered special licenses for fund managers seeking to work with crypto in 2019, there hasn’t been a corresponding surge of interest, according to Blockworks.

For the past four years, anyone handling funds with 10% of gross asset value in crypto must upgrade to Hong Kong’s Type 9 license.

Instead, only 10 fund managers have chosen to upgrade their license since the option became available. Although the licensing application has been reduced in time and fees, the level of interest just hasn’t matched.

“The SFC is more comfortable granting the ‘virtual asset license upgrade’ to fund managers nowadays, as long as the fund managers have requisite experience and expertise, and appoint appropriate service providers including trading platforms, custodians, fund administrators and auditors,” Michael Wong, a partner at the global law firm Dechert, told Blockworks.

“The SFC is more comfortable granting the ‘virtual asset license upgrade’ to fund managers nowadays, as long as the fund managers have requisite experience and expertise, and appoint appropriate service providers including trading platforms, custodians, fund administrators and auditors,” he added.

Although it's not entirely bleak. “We expect more fund managers to upgrade their licenses in the future,” Wong said. “Fund managers are increasingly looking to set up their business in Hong Kong and obtain the relevant licenses to manage virtual assets and conduct fundraises from investors.”