Hong Kong Monetary Authority Warns Public Against Overseas Crypto Firms Misrepresenting Themselves as Banks

The Hong Kong Monetary Authority (HKMA) has issued a warning to the public, cautioning against overseas cryptocurrency firms that falsely claim to be banks. This warning comes as these firms may be violating local banking laws, specifically the Banking Ordinance.

HKMA’s Concerns

The HKMA’s concerns were highlighted in a press release on November 15, where they pointed out that certain overseas crypto firms have been misrepresenting themselves as licensed banks in Hong Kong. These firms have been using the word “bank” in their product descriptions or marketing materials, which may mislead consumers into believing they are licensed banks under the HKMA’s supervision.

The authority cited two specific overseas crypto firms that recently held activities in Hong Kong, with one firm referring to itself as a “bank” and the other describing its card product as a “bank card” on its website.

HKMA’s Reminders

The HKMA reminded the public that under Hong Kong’s Banking Ordinance, only licensed banks, restricted license banks, and deposit-taking companies (collectively known as authorized institutions) are permitted to carry out banking services in the city.

The use of the term “bank” by any entity outside of these institutions is a violation of the law. The HKMA emphasized that crypto firms, even those operating under the name of “bank” or claiming to be “crypto banks,” may not be licensed in Hong Kong.

Consumers should be cautious when dealing with products or services that use “bank” in their names, as they may not necessarily be provided by licensed banks in the jurisdiction.

It is essential for consumers to verify the legitimacy of any financial institution or service provider before engaging with them.

Tips for consumers:

  • Verify the legitimacy of any financial institution or service provider before engaging with them.
  • Check if the institution or service provider is licensed by the HKMA.
  • Be cautious of products or services that use “bank” in their names, as they may not necessarily be provided by licensed banks.

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