Hong Kong central financial institution warns towards crypto companies utilizing banking phrases

The Hong Kong Monetary Authority (HKMA) has issued a warning to customers that crypto companies presenting themselves as banks and utilizing banking terminology may very well be violating the area’s banking legal guidelines. 

In a press launch, the HKMA stated that utilizing sure banking phrases could also be deceptive the general public, inflicting customers to suppose that the crypto companies are approved banks in Hong Kong. However, the central financial institution highlighted that below the area’s banking legal guidelines, solely licensed establishments are allowed to hold out banking or deposit-taking companies in Hong Kong. 

The central financial institution warned the general public that companies describing themselves with phrases like “crypto bank,” “digital asset bank,” and “crypto asset bank” or claims to offer banking providers or banking accounts could also be breaking the regulation. 

According to the HKMA, apart from approved establishments, it’s illegal for individuals or companies to make use of the phrase financial institution within the title or descriptions of their corporations. In addition, facilitating the taking of deposits with out the right license can also be a violation of the regulation. 

The HKMA reminded the general public that crypto companies, which aren’t banks, usually are not supervised by the central financial institution. This implies that funds positioned throughout the so-called “crypto banks” usually are not protected by the area’s deposit safety scheme. 

Related: Hong Kong’s crypto stance: Execs weigh in on Web3 within the area

Hong Kong has just lately been cracking down on violators of its licensing legal guidelines. On Sept. 15, the area’s Securities and Futures Commission (SFC) issued a warning towards crypto trade JPEX for allegedly selling its services in Hong Kong with out securing a license or making use of for one.

Following the SFC’s warning, the trade’s workers seemingly disappeared from its Token 2049 sales space in Singapore. It additionally ramped up its withdrawal charges to as much as 999 Tether (USDT), a transfer that attempted to discourage customers from retrieving their funds from the trade. 

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