Hong Kong's Central Bank Warns Against Misleading Crypto Banks Violating Banking Laws
Summary:
Hong Kong’s central bank warns users about crypto businesses falsely presenting themselves as banks, stating that the use of banking terms may mislead the public. Only licensed institutions are allowed to conduct banking activities in Hong Kong, and firms claiming to be "crypto banks" or offering banking services may be in violation of the law. The Hong Kong Monetary Authority emphasizes that such companies are not supervised by the central bank, and funds deposited in these entities are not protected by the region's deposit protection scheme.
The Hong Kong Monetary Authority (HKMA), the central bank of the region, is cautioning users about crypto businesses that present themselves as banks and use banking terminology, as they might be violating local banking laws. HKMA emphasized that only licensed institutions are permitted to engage in banking or deposit-taking activities in Hong Kong, and the use of certain banking terms could mislead the public. The central bank warned the public about companies using terms such as "crypto bank," "digital asset bank," or "crypto asset bank" and claiming to offer banking services, as this could be unlawful. It is important to note that only authorized institutions are allowed to use the term "bank" in their name or descriptions, and facilitating deposits without the appropriate license is also a violation. HKMA reminded the public that crypto firms that are not banks are not supervised by the central bank, which means funds deposited in these so-called "crypto banks" are not protected under the region's deposit protection scheme. Recent crackdowns on licensing violations in Hong Kong include a warning issued by the Securities and Futures Commission against crypto exchange JPEX for promoting its services without a license. Following the warning, the exchange's staff seemed to have disappeared from its booth at the Token 2049 event in Singapore. The exchange also increased its withdrawal fees to discourage users from retrieving their funds.
Published At
9/17/2023 10:38:01 AM
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