The Hong Kong Monetary Authority (HKMA) has warned the public about cryptocurrency companies that pose as banks and use banking terminology.
Hong Kong Cautions Crypto Companies Against Using Banking Terminology
The Hong Kong Monetary Authority (HKMA) has warned the public about cryptocurrency companies that pose as banks and use banking terminology, claiming that such conduct may violate the region's banking rules.
According to the existing banking rules, only licenced institutions are permitted to engage in banking or deposit-taking activities in Hong Kong, according to the HKMA. Companies that call themselves "crypto banks," "digital asset banks," or "crypto asset banks" and claim to provide banking services or accounts may be breaking the law, according to the central bank.
Individuals or enterprises other than authorized institutions are not permitted to use the term "bank" in their corporate names or descriptions, according to the HKMA. Furthermore, facilitating deposits without the requisite license is a violation of the law. The HKMA warned the public that crypto businesses that are not recognised as banks are not subject to central bank oversight. As a result, funds held in so-called "crypto banks" are not covered by Hong Kong's deposit insurance plan.
Hong Kong has recently become more stringent in enforcing licensing restrictions. The Securities and Futures Commission (SFC) of Hong Kong issued a warning to JPEX
, a cryptocurrency exchange, on 15 September for allegedly promoting its products and services in the region without having the necessary license. Following the SFC's warning, JPEX's employees are said to have fled from its exhibit at the Token 2049 event in Singapore. The exchange allegedly raised its withdrawal fees up to 999 USDT to deter users from withdrawing their funds.
Let us know what you loved about this article, what could be improved, or share any other feedback by filling out this short form.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.