Futu Secures Approval to Offer Virtual Asset Margin Trading in Hong Kong

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Futu has received approval from the Hong Kong SFC to expand its margin trading services to include virtual assets. Eligible clients in Hong Kong can now use traditional securities as collateral for crypto margin trading. Previously, credit limits from traditional margin accounts could not be applied to cryptocurrency, but this restriction has been removed. Virtual assets still face limitations as collateral due to a 100% deduction rule under SFC regulations. This update provides new options for asset allocation strategies involving margin trading.

ChainCatcher report, according to Aastocks, Futu Securities has officially received approval from the Hong Kong Securities and Futures Commission (SFC) to upgrade its Type 1 license (证券交易) to offer margin trading services for virtual assets to eligible clients in Hong Kong. It is understood that, under this service, collateral must still consist of traditional securities; previously, credit lines obtained through traditional securities margin trading could not be used for cryptocurrency transactions, but this restriction has now been lifted to allow such funds to be used for crypto trading. Regarding direct use of virtual assets as collateral for margin trading, although the SFC’s February circular relaxed rules permitting virtual assets as collateral, it also stated that, prior to revisions to capital requirements, virtual asset collateral will be subject to a 100% haircut under the Securities and Futures (Financial Resources) Rules. This is expected to pose certain challenges to capital efficiency within the industry in practical implementation.

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