The Hong Kong Financial Authority (HKMA) has cautioned the general public to stay vigilant towards international crypto companies falsely presenting themselves as banks, in line with 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 will not be approved to make use of the time period “financial institution” of their branding or promotional supplies.
The HKMA confused that such actions might violate the Banking Ordinance, which governs the usage of 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 line with the HKMA, danger deceptive the general public into believing these entities are licensed banks below its supervision.
The monetary authority clarified that solely licensed banks, restricted license banks, and deposit-taking corporations approved 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 counsel an entity is a financial institution or conducts banking enterprise in Hong Kong.
The regulator additionally emphasised that crypto companies not acknowledged as approved 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 latest choice to develop the listing of licensed crypto exchanges by the top of the 12 months.
Regardless of its fame as a key Asian crypto hub, Hong Kong enforces a rigorous licensing course of. To this point, solely three crypto exchanges — OSL Trade, HashKey Trade, and HKVAX — have secured licenses.
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