According to a statement released on Friday, the Hong Kong Monetary Authority has warned cryptocurrency firms parading themselves as banks. In the statement, the regulator disclosed that it is an infringement under the Banking Ordinance for an unregulated firm to disguise itself as a bank.
More so, the HKMA established that most of the erring firms are foreign virtual assets service providers. The regulator recalled how two unlicensed foreign crypto companies hosted an event in Hong Kong with the aim of setting up their presence in the region.
The regulator alleged that the two companies made misleading statements using the word “bank”. Furthermore, the regulator stated that one of the companies presented itself as a bank, while the other described its crypto card as a bank card.
As per the HKMA, these firms made the claims in a bid to lure users claiming that they are regulated under the jurisdiction of the regulator. The authority added that under the Banking Ordinance, only “licensed banks, restricted license banks and deposit-taking companies” approved by the HKMA can carry out banking activities in the country or even claim to be a bank
That said, the HKMA declared that it is illegal for unregulated firms to describe themselves or their services as a bank. However, the HKMA went on to urge investors that despite claiming to offer banking services, most of the crypto firms remained unregistered.
The body added that virtual assets enthusiasts in Hong Kong should not assume those companies are regulated as they claim to be banks.
How Hong Kong Regulators are Ensuring and Safe Digital Assets Market
Lately, Hong Kong has emerged as one of the hottest hubs for cryptocurrency investment. So far, the Hong Kong administration has shown strong support for the virtual assets industry, which in return has spiked the growth of the sector in recent times.
Meanwhile, despite being an emerging hub for digital assets investment, Hong Kong is facing an uphill task towards ensuring that the market is free from bad actors. Regulators in the region have maintained an active presence in the industry to ensure it is safe for all investors.
In May 2024, Binbits reported that the Office of the Privacy Commissioner for Personal Data (PCPD) ordered Worldcoin to halt their activities in Hong Kong. The report revealed that the PCPD after conducting an investigation accused Worldcoin of violating its Personal Data Privacy Ordinance.
Consequently, the PCPD ordered Worldcoin to cease scanning and collecting people’s iris in the region. Likewise, in 2023, the Hong Kong Securities and Future Commission warned investors against using unregulated cryptocurrency exchanges.
Similarly, the SFC urged investors to remain vigilant amidst the growth of the digital assets market in Hong Kong to avoid plunging into fraudulent projects. The recent statement from the HKMA further reflects the committee of Hong Kong authorities to prioritize the safety of all market participants.