Hong Kong’s Monetary Authority (HKMA) has raised a red flag regarding the misleading practices of certain cryptocurrency firms operating within its jurisdiction.
These overseas companies have reportedly exploited the term “bank” to boost their credibility and gain consumer trust, despite not holding licenses to provide banking services in Hong Kong.
In a statement dated November 15, the HKMA highlighted an alarming trend among international crypto businesses operating within Hong Kong’s jurisdiction. Without proper licensing, some of these entities falsely portray themselves as banks or label their products with terms suggesting legitimate banking services.
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Such actions, the regulator emphasized, violate Hong Kong’s Banking Ordinance, a legal framework governing financial institutions in the region.
The warning was prompted by the activities of two specific crypto companies, neither of which the HKMA identified by name. One of these firms explicitly referred to itself as a “bank”, while the other marketed a product on its website as a “bank card”.
To ensure public awareness, the HKMA stressed that crypto firms, unless explicitly authorized, are not under its supervision. They state:
Other than licensed banks in Hong Kong, it is an offence 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.
While the HKMA refrained from naming the companies involved, the statement serves as a reminder of the importance of adhering to legal guidelines in the financial sector.
In other news, Ilya Lichtenstein, the mastermind behind the Bitfinex hack, has been sentenced to five years in prison. What led to this sentencing? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
