The Hong Kong Financial Authority (HKMA) has warned the general public about two foreign-based crypto firms allegedly misrepresenting themselves as banks. The companies had been discovered to have used the time period “financial institution” when describing their services and products, doubtlessly deceptive shoppers.
HKMA Cracks Down On Crypto Corporations Posing As Banks
The HKMA, which additionally serves as Hong Kong’s central financial institution, alerted the general public right now to be cautious of two digital asset companies accused of falsely portraying themselves as banks. In accordance with the regulator, such misrepresentation might breach Hong Kong’s Banking Ordinance, which governs the area’s banking sector.
For the uninitiated, the Banking Ordinance is the first laws regulating banking actions in Hong Kong. It mandates licensing, supervision, and oversight of banking operations whereas prohibiting unauthorized entities from presenting themselves as banks or providing banking providers.
In its assertion, the HKMA revealed that one of many companies claimed to be a financial institution, whereas the opposite marketed a card product on its web site as a “financial institution card.” Such phrases, the regulator famous, may mislead shoppers into believing the companies had been working underneath HKMA’s supervision. The announcement acknowledged:
Apart from licensed banks in Hong Kong, it’s an offence for any individual to make use of the phrase “financial institution” within the title or description underneath which the individual carries on enterprise, or makes any illustration that the individual is a financial institution or is carrying on banking enterprise in Hong Kong.
Whereas the regulator didn’t disclose the names of the 2 entities, it emphasised that crypto companies claiming licenses in different jurisdictions aren’t mechanically acknowledged as licensed banks in Hong Kong.
Regardless of Hong Kong’s ambition to ascertain itself as a worldwide hub for cryptocurrency by way of favorable laws, the area’s authorities are actively monitoring unlawful actions linked to digital property.
Hong Kong Needs To Turn out to be A World Crypto Hub
Hong Kong’s crypto-friendly stance contrasts sharply with neighboring China, the place a blanket ban on cryptocurrency-related actions stays. Nonetheless, current reviews counsel China could also be softening its method to digital property following Donald Trump’s 2024 US presidential election victory.
Hong Kong has emerged as some of the crypto-progressive areas globally, notably in Asia. In accordance with a current report by Chainalysis, Hong Kong ranked as the highest area in East Asia for crypto adoption.
To reinforce its crypto ecosystem, the Hong Kong Securities and Futures Fee (HKSFC) accredited a number of Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) earlier this yr. This transfer highlighted the area’s confidence within the potential of digital property to draw international capital.
In August, Hong Kong residents gained the power to immediately buy BTC and ETH utilizing Hong Kong or US {dollars} by way of the area’s largest on-line dealer. Extra just lately, the Hong Kong Inventory Change (HKSE) launched Asia’s first EU-compliant crypto index, additional solidifying Hong Kong’s standing as a frontrunner within the digital asset house.
Equally, Hong Kong Legislative Council member Johnny Ng just lately made a push to make it simpler for crypto and Web3 companies within the area to acquire seamless entry to banking providers.
Whereas Hong Kong’s regulatory setting goals to nurture the expansion of the cryptocurrency trade, challenges persist. One of many major considerations stays illicit actions, together with cash laundering by way of digital property. BTC trades at $89,915 at press time, down 1.2% up to now 24 hours.
Featured Picture from Unsplash.com, Chart from TradingView.com
