The Hong Kong Monetary Authority (HKMA) recently sent out a clarion call to cryptocurrency companies misusing the term “bank,” in their service descriptions. The HKMA asserts that this falsely implies these firms are under its regulatory oversight.
The watchdog elucidated in a release that only entities granted specific licenses by the HKMA can offer banking or deposit-taking services in Hong Kong, as established by the Banking Ordinance. Some crypto firms have fallen into the pit of comparing their services with those of traditional banks, even coaxing their clients to open what they term as “banking accounts” or positioning their services as “deposits.” Such actions are firmly out of bounds.
This stern caution from the HKMA isn’t isolated. It follows a similar admonishment from the Hong Kong Securities and Futures Commission (SFC) aimed at a certain crypto trading platform known as JPEX. The SFC criticized the platform for utilizing terms such as “crypto ‘deposits,’ ‘savings,’ ‘earnings'” – terminologies that the SFC’s oversight framework for crypto trading platforms doesn’t permit.
More so, JPEX faced criticism for representing itself falsely as a licensed company, although it has not applied for or secured such licensing. Misrepresenting one’s company as a bonafide entity when it hasn’t procured the necessary authorization is not unlike crypto companies’ fraudulent use of the term “bank”.
Earlier in the year, Hong Kong put in place much thought towards welcoming more crypto businesses, even implementing a trial for Central Bank Digital Currency (CBDC). But the recent warnings are an indication of the region’s balanced approach towards crypto regulation. This entails making sure that crypto companies do not misguide the public or function in disregard of well-established regulations.
In summary, while Hong Kong has shown initiative in becoming more accessible to crypto businesses, the recent warnings from the HKMA and SFC underscore that they remain vigilant with regards to crypto company regulation. The authorities continue to work diligently, ensuring that the public isn’t gotten the better of by companies operating in the Hong Kong crypto market.
Source: Cryptonews
