CSOP’s two cryptocurrency funds track Bitcoin and Ether futures, which are listed on the Chicago Mercantile Exchange (CME) in the US.
These “deeply liquid benchmark futures contracts” give retail investors exposure to virtual assets without the need to directly purchase the underlying cryptocurrency, CSOP said in a statement. Product descriptions also highlight funds as a transparent and regulated way to capture the performance of Bitcoin and Ether.
However, the funds come at an awkward time for the industry, as the market slump deepened this year following the collapse of FTX, once the world’s second-largest cryptocurrency exchange. The exchange’s bankruptcy on November 11th sent shockwaves through the industry and led to the collapse of many other platforms exposed to FTX.
The exchange, which started in Hong Kong but moved to the Bahamas last year due to the archipelago’s friendlier crypto policies, took a nosedive last month and quickly collapsed after it was revealed that it had loaned users’ assets to its affiliate trading firm Alameda Research.
Its 30-year-old founder, Sam Bankman-Fried, was arrested in the Bahamas and faces extradition to the US, where the Securities and Exchange Commission (SEC) accused him of defrauding investors and “orchestrating a massive, years-long fraud” that derailed. billions of dollars in client funds “for his own personal benefit.”
Bitcoin has lost more than 60 percent of its value since its peak in December last year, while ether has also fallen by nearly 70 percent over the same period.
Hong Kong stayed the course it set ahead of this year’s FinTech Week on October 31 when it revealed a commitment to re-establishing the city’s status as a regional hub for virtual assets.