Hong Kong regulator takes aim at crypto firms posing as banks

The Hong Kong Monetary Authority, the de facto central bank, warned today that two overseas cryptocurrency firms have misrepresented themselves as banks. This comes as local regulators intensify efforts to combat fraud amid the region’s push to establish itself as a crypto hub.

In a statement released on Friday, the HKMA noted that one overseas crypto firm represented itself as a bank and the other firm described its card product offered on its website as bank card.

“The HKMA is concerned that such claims by these firms mislead consumers to believe they are licensed banks in Hong Kong and are under the HKMA’s supervision, and such products and services are provided by licensed banks in Hong Kong,” the HKMA said. “Such acts may constitute a contravention of the Banking Ordinance.”

The HKMA did not disclose the names of the two firms. The Block reached out to the HKMA for comment.

Hong Kong has rolled out the welcome mat for crypto firms. In June 2023, it officially started a crypto licensing regime for crypto trading platforms, allowing licensed exchanges to offer retail trading services. The regulator has so far granted three licenses to OSL Exchange, HashKey Exchange and HKVAX.

Christopher Hui, Secretary for Financial Services and the Treasury, said last month that the government plans to extend tax concessions for particular investments, including those in cryptocurrencies, by the end of this year.