The Hong Kong Monetary Authority (HKMA) alerts the public to beware of firms engaged in the crypto business purporting to be “banks” or describing their products as “deposits”. It warns that such crypto businesses are violating banking laws.
In a press release, the HKMA revealed that it is aware of some crypto firms describing themselves using terms such as “crypto bank”, “crypto asset bank”, “digital asset bank”, “digital bank” or “digital trading bank”, or claiming to offer “banking services” or “banking accounts”.
Regulators have also observed that some crypto firms use the word “deposits” to describe funds placed with them by clients or promote “savings plans” as “low risk” with “high return”.
These descriptions are misleading people into believing that crypto firms are banks authorized in Hong Kong.
The HKMA highlights that under the Banking Ordinance, only licensed banks, restricted license banks, and deposit-taking companies that have been granted a license by the HKMA can carry out banking or deposit-taking business in Hong Kong.
In Hong Kong, it’s unlawful for persons or businesses other than authorized institutions to use the word bank in the names or descriptions of their companies.
With this alert, the HKMA wishes to remind members of the public that crypto firms that are not banks in Hong Kong are not supervised by the HKMA, and funds placed with them are not protected by the Hong Kong Deposit Protection Scheme.
Also Read: JPEX Faces Liquidity Crisis As Market Makers Freeze Funds
