Iris Coleman
Nov 15, 2024 10:46
The Hong Kong Financial Authority cautions the general public about crypto companies misrepresenting themselves as banks, probably violating the Banking Ordinance.
The Hong Kong Financial Authority (HKMA) has issued a cautionary discover to the general public relating to the misrepresentation of sure abroad cryptocurrency companies as banks inside Hong Kong. These companies have been discovered utilizing the time period ‘financial institution’ inappropriately of their product descriptions, probably deceptive shoppers, based on the Hong Kong Financial Authority.
Crypto Companies Below Scrutiny
The HKMA’s alert highlights cases the place abroad crypto corporations, not licensed as banks in Hong Kong, have misrepresented themselves throughout actions within the area. One agency allegedly claimed to be a ‘financial institution,’ whereas one other described its card product as a ‘financial institution card’ on its web site. These actions elevate considerations about shopper confusion relating to these companies’ regulatory standing and the character of their companies.
Banking Ordinance Violations
Below Hong Kong’s Banking Ordinance, solely approved establishments, corresponding to licensed banks and deposit-taking corporations, can legally conduct banking or deposit-taking actions. It’s a violation for entities apart from licensed banks to make use of the phrase ‘financial institution’ of their enterprise names or descriptions, or to counsel they interact in banking actions with out correct authorization.
Public Advisory
The HKMA advises the general public that crypto companies not acknowledged as approved establishments in Hong Kong will not be beneath its supervision. Moreover, abroad companies with the phrase ‘financial institution’ of their names, or these claiming licensing elsewhere, will not be essentially licensed banks in Hong Kong. The HKMA encourages people to confirm the standing of monetary establishments by way of its on-line register of approved establishments.
Regulatory Framework
In response to the rising intersection of conventional finance and cryptocurrency, the HKMA underscores the significance of adhering to authorized frameworks to guard shoppers and guarantee market integrity. This warning serves as a reminder for shoppers to train due diligence and confirm the legitimacy of monetary companies suppliers.
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