Today, the Hong Kong Monetary Authority (HKMA) issued a warning to cryptocurrency firms that improperly use the time period “bank” in describing their companies.
The authority acknowledged that such wording wrongly suggests these firms are regulated by the HKMA, which isn’t the case. According to HKMA guidelines, solely organizations with particular licenses can function as banks in Hong Kong.
“Under the Banking Ordinance, only licensed banks, restricted license banks and deposit-taking companies, which have been granted a license by the HKMA can carry out banking or deposit-taking business in Hong Kong,” the HKMA clarified in its assertion.
Crypto firms are additionally not allowed to evaluate their companies to conventional banking companies, nor can they encourage clients to open “banking accounts” or label their choices as “deposits.”
Regulatory Actions on Misleading Crypto Companies
This alert from the HKMA follows one other from the Hong Kong Securities and Futures Commission (SFC) concentrating on a crypto buying and selling platform often known as JPEX. The SFC criticized JPEX for utilizing phrases like “crypto ‘deposits,’ ‘savings,’ or ‘earnings,’ which are not permitted under the SFC’s oversight framework for crypto trading platforms.”
The SFC additionally rebuked JPEX for portraying itself as a licensed entity, regardless of not having utilized for or acquired any such license.
In the same vein, again in August, the SFC warned the general public about unlicensed crypto platforms that had been concerned in questionable actions. According to the SFC, platforms that declare to have utilized for licenses “may not be in compliance with the legal and regulatory requirements under the new regime.”
Misrepresenting an organization as a licensed entity when it has not acquired authorization can be an offense, very like the misuse of the time period “bank” by crypto firms.
The Changing Landscape of Hong Kong Crypto Regulation
Earlier this yr, Hong Kong made a number of strikes to change into extra welcoming to crypto companies, together with the initiation of a Central Bank Digital Currency (CBDC) trial. Yet, as these latest warnings point out, the authorities are taking a balanced strategy to crypto regulation, guaranteeing that firms don’t mislead the general public or function outdoors the bounds of established laws.
In brief, whereas Hong Kong has made efforts to change into extra accommodating to crypto companies, the latest actions by HKMA and SFC present that they aren’t letting their guard down when it comes to crypto laws. The authorities are diligently working to make sure that the general public will not be misled by firms working within the hong kong crypto market.
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