The Hong Kong Monetary Authority (HKMA) has warned the public about certain offshore crypto firms that might be misleading consumers by using the word “bank” in their marketing. According to the HKMA, only licensed banks, restricted license banks, and deposit-taking companies authorized by the HKMA are permitted to conduct banking or deposit-taking activities in the region.

The HKMA has identified two overseas crypto firms that have reportedly made misleading representations in Hong Kong. One firm allegedly described itself as a “bank,” while the other referred to its card product as a “bank card” on its website. The HKMA is concerned that these representations could mislead consumers into believing that the firms are licensed banks operating under supervision.

Using the term “bank” in names or product descriptions without the authority’s written consent could potentially be a criminal offence for entities. Under section 97 of the Banking Ordinance, only a licensed bank in Hong Kong or a central bank may use the word “bank” or its derivatives. The HKMA is enforcing a strict regulatory framework to ensure the public is not misled by unauthorized entities posing as legitimate banks.

To help consumers verify authorized institutions, the HKMA has provided resources, including a register of authorized institutions and a Public Enquiry Service hotline. The HKMA is also committed to protecting the public from misleading practices and ensuring a clear distinction between licensed banks and unauthorized entities.

Products or services with names carrying the word “bank” are not necessarily provided by licensed banks in Hong Kong. With these measures, the HKMA aims to mitigate potential risks posed by unauthorized entities in the growing crypto sector. Meanwhile, Hong Kong is trying to position itself as a global leader in digital finance by introducing a robust regulatory framework for virtual assets and cultivating a thriving digital asset ecosystem.

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