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Venture Smart Financial Holdings Ltd. (VSFG), a Hong Kong-based financial services firm, is preparing to file for a spot Ethereum exchange-traded fund (ETF), potentially following the launch of its spot bitcoin ETF.
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VSFG CEO Lawrence Chu said the firm is in the final stages of submitting a formal application for a spot bitcoin ETF to the Hong Kong Securities and Futures Commission.
According to Chu, Hong Kong typically has extensive regulatory discussions before an application is submitted, adding that “the filing is almost like when you’re 95% there.”
VSFG CEO Chu made a statement
Chu said the company aims to file for a spot Ethereum ETF in the second quarter, subject to the approval and listing of the spot bitcoin ETF in the first quarter. “But that really depends on our conversation with the regulator,” he said.
Last month, Livio Weng, chief operating officer of Hong Kong crypto exchange HashKey, said about 10 fund firms have started looking into launching potential spot crypto ETFs in the city.
As several fund firms in the country prepare to file for spot Bitcoin ETFs, a race to the bottom in terms of fees could emerge among asset managers, similar to what has been observed in the US.
“There will be a few ETFs that will come out,” Chu said. “I think our role is a bit subtle because we’re also trying to help ETF issuers get into the game.”
Chu noted that US ETF issuers tend to have their own digital asset teams. “In Hong Kong, there is a bit of a licensing requirement but also a knowledge gap. Most ETF issuers don’t have a digital asset team.”
“It becomes more of a marketing competition among ETF issuers rather than competition for us,” Chu continued in the statement. “From that perspective, you can think of us more as a service provider to all ETF issuers.”