The Hong Kong Financial Authority (HKMA) has cautioned the general public to stay vigilant towards international crypto companies falsely presenting themselves as banks, in response to a Nov. 15 discover.
The regulator revealed that some abroad crypto companies are portraying themselves as banks to realize the belief of Hong Kong customers. Many of those entities function with out correct licenses and are usually not licensed to make use of the time period “financial institution” of their branding or promotional supplies.
The HKMA careworn that such actions might violate the Banking Ordinance, which governs using banking-related phrases and actions in Hong Kong.
Violators
The alert pointed to 2 unnamed international crypto companies as offenders. One reportedly referred to itself as a financial institution, whereas the opposite described its product as a financial institution card. These representations, in response to the HKMA, threat deceptive the general public into believing these entities are licensed banks underneath its supervision.
The monetary authority clarified that solely licensed banks, restricted license banks, and deposit-taking firms licensed by the HKMA are legally permitted to have interaction in banking or deposit-taking actions in Hong Kong.
HKMA acknowledged that the Banking Ordinance prohibits unauthorized people or organizations from utilizing “financial institution” of their names or descriptions. It additionally forbids deceptive representations that recommend an entity is a financial institution or conducts banking enterprise in Hong Kong.
The regulator additionally emphasised that crypto companies not acknowledged as licensed establishments in Hong Kong are outdoors its regulatory scope.
It added that international crypto companies utilizing the time period “financial institution” or branding themselves as “crypto banks” licensed in different jurisdictions don’t essentially maintain a banking license in Hong Kong. Equally, services or products labeled with “financial institution” might not originate from licensed banks within the area.
The warning comes amid Hong Kong’s current choice to increase the record of licensed crypto exchanges by the tip of the yr.
Regardless of its popularity as a key Asian crypto hub, Hong Kong enforces a rigorous licensing course of. Up to now, solely three crypto exchanges — OSL Change, HashKey Change, and HKVAX — have secured licenses.