The Hong Kong Monetary Authority (HKMA) has to caution The public about him Two foreign-based cryptocurrency companies are allegedly presenting themselves as banks. It was found that companies used the term “bank” when describing their products and services, which may mislead consumers.
The Hong Kong Financial Markets Authority is cracking down on cryptocurrency companies posing as banks
The Hong Kong Monetary Authority, which also acts as Hong Kong’s central bank, alerted the public today to be wary of two digital asset companies accused of falsely portraying themselves as banks. According to the regulator, such a misrepresentation would violate the Hong Kong Banking Law, which governs the region’s banking sector.
For starters, the Banking Act is the primary legislation that regulates banking activities in Hong Kong. It stipulates the licensing, supervision and control of banking operations while prohibiting unlicensed entities from presenting themselves as banks or providing banking services.
The Monetary Authority revealed in its statement that one of the two companies claimed to be a bank, while the other announced a card product on its website under the name “bank card.” The regulatory authority noted that such words could mislead consumers into believing that companies operate under the supervision of the Capital Markets Authority. The advertisement stated:
Other than banks licensed in Hong Kong, it is an offense for any person to use the word “bank” in the name or description under which a person carries on business, or to make any representation that the person is a bank or carries on banking business. Business in Hong Kong.
While the regulator did not reveal the names of the two entities, it confirmed that cryptocurrency companies claiming licenses in other jurisdictions are not automatically recognized as licensed banks in Hong Kong.
Despite Hong Kong’s ambition to establish itself as a global cryptocurrency hub through favorable regulations, the territory’s authorities are actively monitoring illegal activities associated with digital assets.
Hong Kong wants to become a global cryptocurrency hub
Hong Kong’s cryptocurrency-friendly stance contrasts sharply with neighboring China, where a blanket ban on cryptocurrency-related activities remains in place. However, recent reports suggest that China may be softening its approach towards digital assets following Donald Trump’s victory in the 2024 US presidential election.
Hong Kong has emerged as one of the most advanced crypto regions globally, especially in Asia. According to a recent report by Chainalysis, Hong Kong was ranked as the best region in East Asia for cryptocurrency adoption.
To strengthen the cryptocurrency ecosystem, the Hong Kong Securities and Futures Commission (HKSFC) consent Several exchange-traded funds (ETFs) for Bitcoin (BTC) and Ethereum (ETH) were launched earlier this year.. The move highlighted the region’s confidence in the potential of digital assets to attract global capital.
In August, Hong Kong residents gained the ability to purchase Bitcoin and Ethereum directly using Hong Kong dollars or US dollars through the region’s largest online broker. Recently, the Hong Kong Stock Exchange (HKSE) launched the first EU-compliant cryptocurrency index in Asia, cementing Hong Kong’s position as a leader in the digital asset space.
Likewise, Hong Kong Legislative Council member Johnny Ng recently made a push to make it easier for cryptocurrency and Web3 companies in the region to have seamless access to banking services.
While Hong Kong’s regulatory environment aims to promote the growth of the cryptocurrency industry, challenges remain. Illicit activities, including money laundering through digital assets, remain a major concern. BTC is trading at $89,915 at press timeDown 1.2% over the past 24 hours
Featured image from Unsplash.com, chart from TradingView.com
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