The Hong Kong Financial Authority (HKMA) has warned the general public about two foreign-based crypto firms allegedly misrepresenting themselves as banks. The corporations have been discovered to have used the time period “financial institution” when describing their services and products, probably deceptive customers.
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 corporations accused of falsely portraying themselves as banks. In response to 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 corporations 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, might mislead customers into believing the corporations have been working underneath HKMA’s supervision. The announcement acknowledged:
Aside from licensed banks in Hong Kong, it’s an offence for any particular person to make use of the phrase “financial institution” within the title or description underneath which the particular person carries on enterprise, or makes any illustration that the particular person 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 corporations claiming licenses in different jurisdictions are usually not mechanically acknowledged as licensed banks in Hong Kong.
Regardless of Hong Kong’s ambition to ascertain itself as a world hub for cryptocurrency by means of favorable laws, the area’s authorities are actively monitoring unlawful actions linked to digital property.
Hong Kong Desires To Turn into A International 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 experiences recommend China could also be softening its method to digital property following Donald Trump’s 2024 US presidential election victory.
Hong Kong has emerged as probably the most crypto-progressive areas globally, notably in Asia. In response to 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) permitted 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 world capital.
In August, Hong Kong residents gained the flexibility to immediately buy BTC and ETH utilizing Hong Kong or US {dollars} by means 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 corporations within the area to acquire seamless entry to banking providers.
Whereas Hong Kong’s regulatory surroundings goals to nurture the expansion of the cryptocurrency business, challenges persist. One of many major considerations stays illicit actions, together with cash laundering by means of digital property. BTC trades at $89,915 at press time, down 1.2% previously 24 hours.
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