HKMA Issues Warning on Crypto Businesses Posing as Banks, Violating Region's Banking Laws
Summary:
The Hong Kong Monetary Authority (HKMA) warns against crypto businesses misrepresenting themselves as banks, using banking terms that could violate banking laws. Only licensed institutions are authorized to conduct banking activities in Hong Kong. Using terms like "crypto bank" or offering banking services without proper authorization may be unlawful. Additionally, funds held in these so-called "crypto banks" are not protected by deposit insurance. Hong Kong's regulatory agencies have been cracking down on violators of licensing laws, including warning a crypto exchange for promoting its services without a license.
The Hong Kong Monetary Authority (HKMA) cautioned users about crypto businesses that present themselves as banks and use banking terminology, potentially violating banking laws in the region. The HKMA emphasized that only licensed institutions are allowed to engage in banking or deposit-taking activities in Hong Kong. It warned the public against firms using terms like "crypto bank," "digital asset bank," or claiming to offer banking services, as they may be breaking the law. Non-authorized institutions are prohibited from using the word bank in their names or descriptions and facilitating deposits without the proper license. The HKMA reminded the public that funds held in crypto banks are not protected by the region's deposit protection scheme. Recently, Hong Kong has been cracking down on violators of licensing laws, such as issuing warnings against crypto exchange JPEX for promoting its services without a license and increasing withdrawal fees to discourage users from retrieving their funds.
Published At
9/17/2023 10:38:01 AM
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