The Hong Kong Monetary Authority (HKMA) warned its citizens that overseas crypto companies are misusing the word “bank” to improve their trust quotient.
On Nov. 15, Hong Kong’s central bank warned the public about crypto companies not licensed banks in Hong Kong making misrepresentations. The HKMA said that the crypto firms represent themselves as banks or use the term to describe their services and products.
The central bank said that these acts are against the law. “Such acts may constitute a contravention of the Banking Ordinance,” the HKMA wrote.
Two crypto firms represented themselves as banks
The HKMA highlighted that the warning comes as two overseas-based crypto companies conducted activities in Hong Kong and represented themselves as banks.
The central bank warned that one company made a representation that it was a bank, while the other described its product on its site as a “bank card.”
The HKMA expressed concerns that such claims by the companies “mislead consumers” to believe that they may be licensed in Hong Kong and that such services and products are provided by banks licensed in the region under the HKMA.
Despite the warning, the HKMA did not name the companies.
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Illegal to use the word “bank” without a license
The central bank explained that authorized institutions like licensed banks, restricted license banks and deposit-taking companies are allowed to facilitate banking services in Hong Kong under the Banking Ordinance. The HKMA wrote:
“Other than licensed banks in Hong Kong, it is an offense for any person to use the word ‘bank’ in the name or description under which the person carries on business or makes any representation that the person is a bank or is carrying on banking business in Hong Kong.”
The banking authority cautioned the public that crypto companies that are not authorized are not supervised by the HKMA. Therefore, the crypto firms carrying the word bank or using the term in their services are not necessarily licensed in Hong Kong.
The HKMA also said that under its laws, it’s an offense for unlicensed companies to use the term “bank” or make representations that they are performing banking services in Hong Kong.
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