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10 Fund Managers in Hong Kong Upgrade Licenses to Manage Cryptocurrencies

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According to reports, Michael Wong, a partner at De Jie Law Firm, stated that since the issuance of guidelines by the Hong Kong Securities and Futures Commission (SFC) in 2019, 10

10 Fund Managers in Hong Kong Upgrade Licenses to Manage Cryptocurrencies

According to reports, Michael Wong, a partner at De Jie Law Firm, stated that since the issuance of guidelines by the Hong Kong Securities and Futures Commission (SFC) in 2019, 10 fund managers in Hong Kong have upgraded their licenses to manage cryptocurrencies. With the necessary Class 9 (asset management) license, fund managers will be able to invest 10% of their total asset value under management in the digital asset sector.

About 10 fund managers in Hong Kong have obtained Category 9 (Asset Management) licenses

The Hong Kong Securities and Futures Commission (SFC) issued guidelines in 2019 that provided clarity on the regulatory framework for digital assets. Since then, 10 fund managers in Hong Kong have upgraded their licenses to manage cryptocurrencies, according to Michael Wong, a partner at De Jie Law Firm.

The Class 9 License

To invest in the digital asset sector, fund managers must hold a Class 9 (asset management) license issued by the SFC. With this license, fund managers can invest up to 10% of their total asset value under management in the digital asset sector.

The Growing Influence of Cryptocurrencies

Cryptocurrencies have gained widespread attention in recent years due to their many advantages over traditional forms of currencies. Instead of centralized control by a government or financial institution, cryptocurrencies are maintained by a decentralized network of users. This makes them less vulnerable to manipulation or attacks.
Increasingly, cryptocurrencies are being recognized as a legitimate asset class, with many investors including them in their portfolios. As the crypto industry continues to mature, it is likely that more and more fund managers will seek the necessary licensing to invest in this sector.

Benefits of Cryptocurrency Investment

There are several reasons why fund managers might want to invest in cryptocurrencies. First, cryptocurrencies provide diversification benefits for portfolios. As an uncorrelated asset class, cryptocurrencies have the potential to deliver returns even when traditional markets are down.
Additionally, cryptocurrencies have the potential for strong returns. Bitcoin, for example, has delivered returns of over 300% in the past year alone. This compares favorably to traditional assets such as stocks and bonds.

Considerations for Cryptocurrency Investment

Despite the potential benefits of investing in cryptocurrencies, there are several important considerations that fund managers must keep in mind. First, cryptocurrencies are highly volatile and can experience significant price swings in a short period of time. This can make them challenging to trade and requires a high level of skill and experience.
Second, cryptocurrencies are subject to regulatory risks. While the regulatory environment for digital assets is improving, there is still some uncertainty about how these assets will be treated in the future.
Finally, cybersecurity risks are a growing concern in the crypto industry. Because cryptocurrencies are digital assets, they are vulnerable to hacking and theft. Fund managers must take appropriate measures to safeguard their investments.

Conclusion

In conclusion, the issuance of guidelines by the Hong Kong Securities and Futures Commission has opened up new opportunities for fund managers to invest in cryptocurrencies. As the crypto industry continues to gain traction, it is likely that we will see more and more funds incorporate digital assets into their portfolios.

FAQs

Q: How does the Class 9 license work?
A: The Class 9 license is issued by the Hong Kong Securities and Futures Commission and allows fund managers to invest up to 10% of their total asset value under management in the digital asset sector.
Q: What are the benefits of investing in cryptocurrencies?
A: Cryptocurrencies provide diversification benefits for portfolios and have the potential for strong returns.
Q: What are some considerations when investing in cryptocurrencies?
A: Cryptocurrencies are highly volatile, subject to regulatory risks, and vulnerable to cybersecurity threats.

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