Wednesday, 30 April 2023, 09:30 CET | News – HashKey Capital has received regulatory approval from Hong Kong’s Securities and Futures Commission (SFC) for enabling in-kind subscriptions to its HashKey Digital Investment Fund. Such approval permits active contributions from investors of a wider range of digital assets into the fund. This mechanism marks a significant departure from traditional fund subscription practices where only cash payments are accepted.
In-Kind Subscription Details
According to the SFC approval, contributors can redeem varied digital currencies as assets into the HashKey Digital Investment Fund managed by HashKey Capital. The firm’s offering permits contributions not only in cryptocurrency but also in any of the top hundred listed cryptocurrencies by market capitalization. The cited source includes, but is not limited to, Bitcoin, Ether, Ripple, Solana, Dogecoin, Cardano, Sui, Chainlink, Toncoin, and Polkadot as meeting the specified requirements.
Shift from Fiat-Based Access
As mentioned in the official press release, the addition of in-kind subscriptions modifications eases the traditional process for investors trying to access regulated funds. In the past, investors had to first convert their digital assets into fiat currency to be able to subscribe. This conversion process came with several risks, including lengthy delays, high conversion costs, and inefficient pricing that could alter the final investment amount. The additional in-kind subsidy provided by HashKey Capital removes this intermediary step and enables direct transfers of the supported digital tokens. This market-making approach seeks to simplify and enhance efficiency for crypto holders seeking direct access to the fund.
Rationale and Benefits
A representative from HashKey Capital claims that the in-kind subscription model fits with the storage and usage patterns of digital assets by investors. This system is perceived as providing easier access for people who possess cryptocurrency to invest in a regulated fund. The HashKey Capital official also remarked that improving operational efficiency in the fund’s administration is an additional expectation for such a mechanism. In addition, it may help increase the level of participation in regulated crypto offerings in the region by reducing the investment threshold for prospective investors who predominantly possess digital currencies rather than traditional currencies.
Broader Expansion of Regulated Services
The launch of the in-kind subscription feature is an additional effort by HashKey Capital to widen its regulated service offerings within the digital asset industry in Hong Kong. Also, in the past few months, the firm is said to have received further regulatory approval from the SFC with regard to additional services. These include approval for Ethereum staking services and the granting of discretionary account management services with digital assets. All of these changes seem to suggest that HashKey Capital is implementing a strategy to provide a complete range of regulated services to investors in the digital assets ecosystem.
Market Placement in Hong Kong
With these recent moves, including SFC authorization for in-kind subscriptions and other facilitative approvals, HashKey Capital further deepens its foothold in Hong Kong’s regulated digital asset ecosystem. These moves place the firm strategically among a handful of asset managers permitted to offer this level of direct access to crypto funds and related services within the jurisdiction. Currently, HashKey Capital manages a suite of digital asset products, which include the actively managed fund now open to in-kind subscriptions. The firm also manages the Bosera HashKey Bitcoin and Ether spot ETFs, which are now listed and traded on the HKEX, affirming its position as a provider of regulated investment options for digital assets.
