Hong Kong Regulator Warns Crypto Businesses Against Violating Banking Laws
The Hong Kong Monetary Authority (HKMA) has issued a warning to users about crypto businesses that present themselves as banks and use banking terminology, stating that they may be violating the region’s banking laws. In a press release, the HKMA emphasized that only licensed institutions are allowed to carry out banking or deposit-taking businesses in Hong Kong.
According to the HKMA, some crypto firms are misleading the public by using terms like “crypto bank,” “digital asset bank,” and “crypto asset bank,” or by claiming to offer banking services or accounts. These actions are potentially illegal under Hong Kong’s banking laws, which prohibit the unauthorized use of the word “bank” in company names or descriptions, as well as facilitating deposit-taking without the proper license.
The HKMA reiterated that crypto firms, which are not banks, are not supervised by the central bank. Consequently, funds placed within these so-called “crypto banks” are not protected by the region’s deposit protection scheme.
This warning comes as Hong Kong tightens its enforcement of licensing laws. On September 15, the region’s Securities and Futures Commission (SFC) issued a warning against JPEX, a crypto exchange that allegedly promoted its products and services in Hong Kong without securing or applying for a license.
In response to the warning, JPEX staff seemingly vanished from their booth at the Token 2049 event in Singapore, and the exchange increased its withdrawal fees in an attempt to discourage users from retrieving their funds.
It is essential for users in Hong Kong to be aware of these regulatory warnings and exercise caution when dealing with crypto firms that may be operating outside the confines of the law.
Sources:
– Hong Kong Monetary Authority Press Release: https://cointelegraph.com/news/crypto-hong-kong-central-bank-warnscrypto-firms-using-banking-terms
– Related Cointelegraph Article: https://cointelegraph.com/news/crypto-hong-kong-central-bank-warnscrypto-firms-using-banking-terms
– Securities and Futures Commission Warning: https://cointelegraph.com/news/crypto-hong-kong-central-bank-warnscrypto-firms-using-banking-terms
– Magazine: https://cointelegraph.com/news/crypto-hong-kong-central-bank-warnscrypto-firms-using-banking-terms
❗Follow us on Twitter to get all the latest crypto news as soon as they're out! 🚀
About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
View J-S Tremblay website
