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.
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