OSL and Solomon Set to Facilitate In-Kind Crypto Transactions for ETFs

OSL and Solomon Set to Facilitate In-Kind Crypto Transactions for ETFs

by April 29, 2024

OSL Digital Securities, a Hong Kong-licensed and regulated digital assets exchange, is set to enhance its current brokerage model to include comprehensive advisory and operational support in partnership with Solomon JFZ (Asia) Holdings Limited.

This development is key to introducing Hong Kong’s first Spot Crypto ETFs, which will soon be launched.

The enhanced collaboration will see Solomon acting as a participating dealer, facilitating in-kind transactions essential for subscribing to or redeeming ETF shares directly with the underlying digital assets.

According to the digital assets exchange, this partnership leverages the expertise of OSL in secure digital asset custody and regulated trading alongside financial dealing capabilities of Solomon, ensuring the ETF meets the highest compliance and security standards.

Patrick PanOSL and Solomon

Patrick Pan

“The introduction of these ETFs marks a significant enrichment of Hong Kong’s financial landscape, enhancing investment options and market liquidity which are crucial for our economy’s dynamism. At OSL, leveraging our status as the only publicly listed digital assets company in Hong Kong, we ensure leadership through stringent regulatory compliance and a proven track record, evidenced by our successful SOC 2 Type 2 audit. We’re proud to support this pivotal financial innovation,”

said Patrick Pan, Chairman of the Board & CEO of OSL.

Solomon is among the first batch of SFC-approved participating dealers to support physical in-kind subscription and redemption for these pioneering spot crypto ETFs in Hong Kong.

Thomas Tam, Chief Executive Officer of SOLOWIN, commented,

“We are excited to play a crucial role in the launch of the first spot Bitcoin and Ethereum ETF in Hong Kong. The approval, coming just three months after the U.S. introduced similar ETFs which attracted around US$12 billion in investments, marks a significant regulatory advancement for Hong Kong’s aspirations to be a global virtual asset hub. And the introduction of the in-kind subscription mechanism that allows investors to buy into the ETF using Bitcoin or Ethereum directly is viewed as a transformative vehicle for channeling significant investment into the virtual asset space.”

Featured image credit: Edited from Freepik