Chinese nationals barred from Hong Kong crypto ETFs.

Hong Kong regulators have made it clear that mainland Chinese residents will not be able to access Hong Kong spot Bitcoin and Ethereum ETFs after their April 30 launch. 

“No matter the virtual asset futures ETFs currently on the Hong Kong market, or the virtual asset spot ETFs that will be issued in the future, they cannot be sold to retail investors in mainland China and other places where the sale of virtual asset-related products is prohibited,” the city’s Securities & Futures Commission said in a statement. 

There is one minor loophole, however: The ban does not include mainland Chinese residents who also have a temporary or permanent residence permit in Hong Kong. Interestingly, all three issuers of the Hong Kong spot crypto ETFs are Chinese off-shore asset managers, and their products are tradable in the Chinese yuan. 

China’s Anti-Money Laundering laws and Bitcoin ban, enacted in 2007 and 2021, respectively, prevent its citizens from accessing the ETF products in Hong Kong. In recent years, Chinese nationals have increasingly used cryptocurrencies as a means of online gambling, transferring wealth abroad and laundering proceeds of crime.