Hong Kong’s HKMA warns against overseas crypto firms posing as banks

The Hong Kong Monetary Authority is warning the public about offshore crypto firms falsely claiming to be banks and urging caution as such claims could violate local banking laws.

Hong Kong’s financial regulator, the Hong Kong Monetary Authority, warned against offshore crypto firms misrepresenting themselves as licensed banks in a press release on Nov. 15, saying such firms may be violating local regulations by using the word “bank” in their product descriptions or marketing. . materials.

The HKMA recently highlighted two overseas crypto firms operating in Hong Kong. One company reportedly referred to itself as a “bank” on its website, while the other described its card product as a “debit card.”

The official expressed concern that these representations “could mislead consumers into believing that they are licensed banks in Hong Kong and are under the supervision of the HKMA, and that such products and services are provided by licensed banks in Hong Kong.”

Under the Hong Kong Banking Ordinance, only licensed banks, limited licensed banks and deposit-taking companies, collectively known as authorized institutions, are allowed to operate banking services in the city. The HKMA added that use of the term “bank” by any entity other than these institutions is a violation of the law.

The HKMA reminded the public that even crypto companies operating under the name “bank” or claiming to be “crypto banks” may not be licensed in Hong Kong. The regulator emphasized that products or services that use “bank” in their names are not necessarily provided by licensed banks in the jurisdiction.