Hong Kong virtual bank Mox starts bitcoin, ether ETF trading, plans direct crypto trading

Hong Kong-based virtual bank Mox has launched a cryptocurrency exchange-traded fund (ETF) service for its clients, expanding its service offerings months after launching the Mox Invest platform as part of Hong Kong’s efforts to transform the city into a virtual asset hub.

The Standard Chartered subsidiary launched the service on Monday, becoming the first virtual bank to allow spot bitcoin and ethereum ETFs, which launched in Hong Kong earlier this year, to be traded directly on its platform, as the company positions itself as a one-stop investment and banking platform for retail investors.

“The launch of crypto ETFs is just the beginning of what Mox plans to offer in the crypto investment space,” the bank’s chief product officer Jayant Bhatia told the Post in an interview on Monday. “We want to offer clients a safer way to diversify their investments into one asset class.”

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Mox Bank’s chief product officer Jayant Bhatia, seen here at the company’s Hong Kong office in Quarry Bay, says the virtual bank has just started offering crypto services. Photo: Mox Bank alt=Mox Bank’s chief product officer Jayant Bhatia, seen here at the company’s Hong Kong office in Quarry Bay, says the virtual bank has just started offering crypto services. Photo: Mox Bank>

The ETFs, which invest directly in the world’s two largest cryptocurrencies, join other ETF products offered through Mox Invest, which launched in February. The company said U.S. crypto futures are also available, but no U.S. spot crypto ETFs are available.

Mox plans to allow users to purchase cryptocurrencies directly on its platform, which has proven to be an attractive option for financial services providers. Digital brokerages Tiger Brokers and Futu recently launched crypto trading services.

Bhatia did not say when crypto trading would be available on Mox, but said the bank would partner with a licensed exchange to offer the service. Hong Kong requires operators without a virtual asset trading platform license to use a licensed exchange for crypto trading. So far, only local exchanges HashKey and OSL are licensed to offer retail crypto trading, and they only offer bitcoin and ether trading for retail.

While Hong Kong’s spot bitcoin and ether ETFs can be purchased through any traditional trading platform, Mox aims to differentiate itself on price by emphasizing its low overheads as a fully virtual bank.

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Mox charges 0.12 percent of trading volume and a minimum of HK$30 (US$3.84) for Hong Kong-listed ETFs, and 0.01 percent and a minimum of US$5 per share for US-listed ETFs.

“It’s very competitive and actually the cheapest among banks in Hong Kong,” said Henry Lau, Mox’s chief investment officer. Bhatia added that it was almost half the price offered by traditional Hong Kong banks.

Mox entered the crypto financial services market as cryptocurrencies entered a difficult period following the highs of the first half of the year. Months after reaching a record high of $73,738 in March, the price of bitcoin fell as much as 16% on Monday as investors dumped stocks and other assets amid economic uncertainty, according to CoinGecko data.

The recent bitcoin price declines are some of the biggest since the 2022 crash of crypto exchange FTX. Bitcoin briefly traded below $50,000 on Monday afternoon, but by evening it had climbed well above $52,000.

“There are clearly volatility risks that clients need to understand,” Bhatia said. “We will ensure that the risks are very transparent to clients and we recommend that they have diversified asset classes to manage their investments. I think starting with ETFs is the first step in the right direction.”

Later in the year, Mox plans to launch a “core portfolio” solution that the company says will bring professional-level trading features to retail investors. The product will be tailored to a client’s profile and risk tolerance.

Bhatia said that despite the wild price swings of cryptocurrencies, Hong Kongers are “savvy investors who should look at investment vehicles that give them optionality, whether it’s direct stocks, ETFs, gold, funds and now cryptocurrencies.”

According to Bhatia, about 28 percent of Mox customers are already investing in crypto, and 18 percent of those customers are active crypto investors.

“We fundamentally believe that crypto investing is here to stay,” Bhatia said. “Our goal is to deliver it in a secure way.”

This article was first published in the South China Morning Post (SCMP), the most authoritative voice on China and Asia for more than a century. For more SCMP news, please check out the SCMP app or follow SCMP on Facebook and twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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