As a seasoned crypto investor with a keen eye for regulatory matters, I find the recent warning by the Hong Kong Monetary Authority (HKMA) both intriguing and concerning. Having navigated through the complex landscape of digital assets for years, I’ve come to appreciate the importance of transparency and compliance in this industry.
The Hong Kong Monetary Authority (HKMA) has cautioned its residents about foreign cryptocurrency firms falsely using the term “bank” to boost their credibility.
On November 15th, Hong Kong’s monetary authority cautioned the public against unlicensed cryptocurrency companies in Hong Kong who are deceitfully presenting themselves as banks. The HKMA stated that these crypto firms often misleadingly portray themselves as banks or use banking-related terms to describe their services and products.
According to the central bank, such actions might be considered as breaking the rules outlined in the Banking Ordinance.
Two crypto firms represented themselves as banks
The Hong Kong Monetary Authority (HKMA) pointed out that the cautionary statement was issued because two foreign cryptocurrency firms had been engaging in operations within Hong Kong while posing as banks.
The central bank warned that one company made a representation that it was a bank, while the other described its product on its site as a “bank card.”
The Hong Kong Monetary Authority voiced worries that these corporate statements might deceive customers into thinking their operations or offerings are authorized in Hong Kong, when in reality, they are not regulated by banks licensed under the HKMA in the region.
Despite the warning, the HKMA did not name the companies.
Illegal to use the word “bank” without a license
In Hong Kong, it is permitted for recognized financial institutions such as licensed banks, limited license banks, and depository firms to offer banking services. This is based on the Banking Ordinance, as clarified by the Hong Kong Monetary Authority (HKMA).
“Other than licensed banks in Hong Kong, it is an offense for any person to use the word ‘bank’ in the name or description under which the person carries on business or makes any representation that the person is a bank or is carrying on banking business in Hong Kong.”
The financial regulator advises the public that cryptocurrency businesses without authorization are not under the purview of the Hong Kong Monetary Authority (HKMA). Consequently, any crypto firms that claim to be banks or use banking terms in their operations might not be legally licensed within Hong Kong.
According to the HKMA, it’s illegal for companies without a license to refer to themselves as banks or imply that they offer banking services in Hong Kong under their current laws.
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2024-11-15 14:32