Hong Kong Monetary Authority Warns Against Crypto Businesses Posing as Banks
The Hong Kong Monetary Authority (HKMA) has issued a warning to the public about crypto businesses that claim to be banks and use banking terms in their marketing materials. The central bank cautions that these firms may be violating the Banking Ordinance, which only allows licensed banks, restricted license banks, and deposit-taking companies to use the term “bank.”
HKMA Highlights Misleading Terminology Used by Crypto Companies
The HKMA has emphasized that crypto companies are using terms such as “crypto asset bank,” “digital asset bank,” “digital bank,” “banking services,” or “banking accounts” that can be misleading for customers. This can lead to misconceptions about the nature of these businesses.
Crypto Businesses Offer High Returns, Similar to Celsius
These crypto businesses often promote returns that far exceed those offered by traditional banks, making them attractive to unsuspecting individuals. The collapse of Celsius, a crypto lender, serves as an example. The company initially offered up to 18% returns without apparent risks. However, it later filed for bankruptcy in July last year.
JPEX Accused of Fraudulent Marketing
The Hong Kong Securities and Futures Commission (HKSFC) recently warned investors about a crypto exchange called JPEX. The HKSFC accused the exchange of having “suspicious features” and making false claims about its license. While several exchanges have applied for licenses with the HKSFC after new laws were implemented, JPEX was not among them.
Hot Take: Exercise Caution When Dealing with Crypto Businesses in Hong Kong
When engaging with crypto businesses in Hong Kong, it is essential to exercise caution and verify their legitimacy. The HKMA’s warning serves as a reminder to be vigilant and avoid falling for misleading marketing tactics. Always ensure that the businesses you interact with are properly licensed and regulated to protect yourself from potential risks and scams.
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