Hong Kong is sending a strong message to crypto companies: just because you’re in the digital currency business doesn’t mean you can call yourself a “bank.” In fact, if you’re not officially licensed by the Hong Kong Monetary Authority (HKMA), you might be breaking the law by using that term at all. Let’s break down what’s happening and why it matters.
The Lowdown: HKMA Warns Crypto Firms About Misleading ‘Bank’ Claims
On November 15, Hong Kong’s central bank issued a clear warning to the public: if you’re a crypto company without a banking license, don’t try to pass yourself off as a bank. The Hong Kong Monetary Authority (HKMA) flagged a worrying trend where certain overseas crypto companies have been calling themselves “banks” or labeling their products with banking terminology—like “bank cards”—to gain consumer trust.
The issue? In Hong Kong, using the word “bank” without the proper authorization isn’t just a bad look—it’s illegal. HKMA is concerned that these misleading claims might confuse consumers into thinking these companies are regulated, licensed institutions when they aren’t. And that could be a real problem.
Crypto Companies Playing the ‘Bank’ Card—But Not for Long
The HKMA’s warning comes after it identified two specific crypto firms that were operating in Hong Kong while presenting themselves as banks. One company explicitly claimed to be a bank, while the other described its product as a “bank card” on its website. According to the HKMA, these representations could easily lead customers to believe they’re dealing with a fully licensed bank in Hong Kong.
Here’s the kicker: these companies don’t have the necessary licenses to operate as banks. The HKMA didn’t name names, but it’s clear that they’re looking out for consumers and cracking down on this behavior.
The Legal Fine Print: Using ‘Bank’ Without Permission Is a No-Go
The key issue here is the Banking Ordinance, which governs how financial services and institutions can operate in Hong Kong. Under this law, only officially authorized institutions—such as licensed banks, restricted license banks, and deposit-taking companies—can use the term “bank” to describe their services.
In other words, if you don’t have the HKMA’s stamp of approval, you can’t legally call yourself a bank or make any representations suggesting you are one. The law is crystal clear: it’s a criminal offense to use the word “bank” in your name or marketing unless you’re properly licensed by the Hong Kong authorities.
The HKMA spelled it out in their statement: “Other than licensed banks in Hong Kong, it is an offense for any person to use the word ‘bank’ in the name or description under which the person carries on business or makes any representation that the person is a bank or is carrying on banking business in Hong Kong.”
Why This Matters: Protecting Consumers in the Crypto Age
For consumers, the warning from the HKMA is an important reminder that not everything that glitters in the crypto world is gold. While crypto is seen by some as a revolutionary financial tool, it still operates in a space where regulations are catching up. So, when a crypto company starts using traditional banking language to promote its products, it can blur the lines between what’s real and what’s speculative.
By cracking down on these misrepresentations, the HKMA is making sure that consumers don’t get caught up in potentially shady or unregulated activities. The central bank wants to ensure that any banking services offered to residents are fully licensed, safe, and compliant with local laws.
What Crypto Firms Need to Know: Don’t Cross the Line
If you’re a crypto firm thinking about expanding your business in Hong Kong, the message is simple: don’t pretend to be a bank unless you actually are one. The HKMA has made it clear that companies must play by the rules and avoid any language that could mislead consumers.
This warning should serve as a reminder to all crypto companies—especially those new to the Hong Kong market—that the financial regulatory environment in the region is serious. If you’re offering services that resemble banking or financial products, make sure you have the right licenses and approvals in place. Otherwise, you could find yourself in hot water with the authorities.
The Bottom Line: Crypto or Bank? You Can’t Be Both Without Permission
Hong Kong is doubling down on protecting its financial ecosystem from potential confusion or abuse in the crypto space. By preventing unlicensed companies from using the term “bank,” the HKMA is safeguarding consumers and ensuring that only properly regulated institutions can offer banking-like services in the region.
So, whether you’re a crypto firm or a consumer, it’s important to remember: in Hong Kong, if it looks like a bank and sounds like a bank, it better be a bank—legally speaking, anyway.
This crackdown serves as a reminder to crypto firms everywhere that in Hong Kong, there’s no room for misrepresentation. So, if you’re thinking of throwing around banking lingo, be sure you’ve got the license to back it up!
