Hong Kong Issues Warning to Crypto Firms Posing as Banks

Hong Kong’s Warning to Crypto Companies

The regulators in Hong Kong have recently issued a warning against cryptocurrency enterprises that are posing as regulated firms. The HKMA has recently published an official warning against CBDC projects that have claimed that they are banks and classified their products as deposits.

The regulator has also issued a warning against such institutions that are making such falsified claims and advised the public when dealing with these companies. The regulatory agency has taken up an issue with the crypto companies that are marketing themselves as banking services as per the investigation.

 HKMA officials have claimed that such institutions are violating the Banking Ordinance of the region that every regulated financial entity must follow.

At the same time, the firm has retained that misleading descriptions and claims made by these entities may mislead the public that these companies have authorization to act as officiated banks in Hong Kong and they can be deceived to entrust their savings to such fraudulent companies.

Only Licensed Companies can Offer Banking Services

HKMA has retained in its latest press release that only companies that have acquired a license from the regulator can offer banking services to their clients. The agency invoked the Banking Ordinance while maintaining any firm found in violation of these actions will be subjected to punishment in accordance with the legal guidance.

The bank has dubbed the mention of the word banking services and its synonyms as an illegal act and violation of banking code in the press release. At the same time, the agency has clarified that it is illegal for an individual to act as a deposit collector.

Furthermore, companies and individuals are also barred from inviting the public to offer any type of deposit options. These formal warnings have arrived at a time when the Securities and Futures Commission took action against JPEX for posing as a regulated enterprise.

The regulators issued a warning against the exchange claiming that it was unregulated and was not included among the trading platforms that have applied for a registration.

At the same time, the regulators also took an issue with the false description published on the official website as a licensed entity and directed the firm to remove it.

Hong Kong Legislative Council Responds to Vitalik Buterin’s Comments

Recently, Ethereum co-founder Vitalik Buterin has expressed some concerns about the stability of crypto-friendly stance of Hong Kong. He also raised questions about the complicated interaction between mainland China and Hong Kong regarding the matter of crypto regulations.

Jhonny Ng from the legislative council of Hong Kong has responded to the comments by claiming that the regulatory stance of the region is not going to change overnight.

He also extended a friendly visit to Buterin and claomed that he will work in tandem with the concerned institutions to update on the regulatory situation in the region. Meanwhile, a new report published by Forex suggests that Hong Kong has retained its position as the most crypto-friendly country by ranking it as leading state in terms of ATM installations, pro-crypto regulations, start-up support, and appropriate tax policies.