Hong Kong authority cautions crypto firms claiming to be banks
The Hong Kong Monetary Authority (HKMA) issued a warning today about two foreign cryptocurrency companies that have falsely identified themselves as banks.
According to the de facto central bank, cryptocurrency companies that are not authorized banks in Hong Kong may violate the Banking Ordinance if they represent themselves as banks in Hong Kong or use the word "bank" in the descriptions of their products or services.
HKMA warns cryptocurrency companies posing as banks
The HKMA would like to remind the public that it does not oversee cryptocurrency companies that are not recognized as Hong Kong institutions, the post said. Foreign cryptocurrency companies with names that include the word "bank" or overseas "crypto banks" that say they have a license somewhere else aren't always Hong Kong-licensed banks. Furthermore, licensed banks in Hong Kong do not always offer goods or services with names that contain the word "bank."
Alert: Please be cautious about crypto firms which may have misused the word “bank”. Certain overseas crypto firms, in recent events in HK, were reported to have made the representation that the firm was a “bank” or offered card product as “bank card” on the firm’s website. pic.twitter.com/Va5ebhhbTI
— HKMA 香港金融管理局 (@hkmagovhk) November 15, 2024
The HKMA said in a statement on Friday that one foreign cryptocurrency company posed as a bank and another company referred to the card product it offered on its website as a bank card.
HKMA has learned that during the events held in Hong Kong by two foreign cryptocurrency companies that do not hold Hong Kong bank licenses, one of the companies allegedly represented itself as a "bank," while the other company referred to its online card product as a "bank card," the post stated. The HKMA is worried that these companies' claims could mislead customers into thinking that they are HKMA-supervised banks with licenses and that these products and services are offered by Hong Kong-licensed banks.
Only authorized institutions by HKMA can perform banking services
Only licensed banks, restricted license banks, and deposit-taking companies that have been approved by the HKMA are permitted to conduct banking or deposit-taking operations in Hong Kong under the Banking Ordinance. It is illegal for anyone, excluding licensed banks in Hong Kong, to use the word "bank" in the name or description of their business or to imply that they are a bank or are conducting banking operations in Hong Kong.
Hong Kong becomes a global crypto-friendly region
As the region aims to become a crypto hub, local regulators are stepping up their efforts to combat fraud. Meanwhile, Hong Kong has extended a warm welcome to cryptocurrency companies. It formally launched a crypto licensing program for cryptocurrency trading platforms in June 2023, enabling authorized exchanges to provide retail trading services. HKVAX, OSL Exchange, and HashKey Exchange have received three licenses from the regulator thus far.
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