The Hong Kong Financial Authority (HKMA) has warned the general public about two foreign-based crypto corporations allegedly misrepresenting themselves as banks. The companies have been discovered to have used the time period “financial institution” when describing their services and products, probably 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 at present to be cautious of two digital asset companies accused of falsely portraying themselves as banks. Based on the regulator, such misrepresentation could 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 have been working below HKMA’s supervision. The announcement said:
Aside from licensed banks in Hong Kong, it’s an offence for any individual to make use of the phrase “financial institution” within the identify or description below 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 routinely acknowledged as licensed banks in Hong Kong.
Regardless of Hong Kong’s ambition to ascertain itself as a world hub for cryptocurrency via favorable rules, the area’s authorities are actively monitoring unlawful actions linked to digital property.
Hong Kong Needs To Grow 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, latest experiences recommend China could also be softening its strategy to digital property following Donald Trump’s 2024 US presidential election victory.
Hong Kong has emerged as one of the crypto-progressive areas globally, significantly in Asia. Based on a latest 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) authorized a number of Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) earlier this 12 months. 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 straight buy BTC and ETH utilizing Hong Kong or US {dollars} via the area’s largest on-line dealer. Extra just lately, the Hong Kong Inventory Trade (HKSE) launched Asia’s first EU-compliant crypto index, additional solidifying Hong Kong’s standing as a pacesetter within the digital asset area.
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 via 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
