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

The Hong Kong Financial Authority is warning the general public about abroad crypto firms falsely claiming to be banks, urging warning as such claims could violate native banking legal guidelines.

Hong Kong’s monetary regulator, the Hong Kong Financial Authority, warned in a Nov. 15 press launch towards abroad crypto corporations misrepresenting themselves as licensed banks, saying such corporations could also be violating native rules through the use of the phrase “financial institution.” use of their product descriptions or advertising and marketing supplies.

The HKMA highlighted two overseas crypto firms that not too long ago had operations in Hong Kong. One firm allegedly referred to itself as a ‘financial institution’, whereas the opposite described its card product on its web site as a ‘financial institution card’.

The authority expressed concern that these statements “might mislead customers into believing that they’re licensed banks in Hong Kong and supervised by the HKMA, and that such services are supplied by licensed banks in Hong Kong.”

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Underneath Hong Kong’s Banking Regulation, solely licensed banks, restricted licensed banks and depository firms, collectively often called approved establishments, are allowed to conduct banking providers within the metropolis. The usage of the time period “financial institution” by any entity outdoors these establishments is a violation of the regulation, the HKMA added.

The HKMA reminded the general public that crypto firms, even these working below the title ‘financial institution’ or claiming to be ‘crypto banks’, is probably not licensed in Hong Kong. Services or products that use “financial institution” of their title should not essentially supplied by licensed banks within the jurisdiction, the regulator identified.

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