The Hong Kong Monetary Authority (HKMA), the central bank of the special administrative region, has issued a warning to users that crypto companies presenting themselves as banks and using banking terminology could be violating the region's banking laws. .
In a press release, the HKMA saying that the use of certain banking terms can mislead the public, making users think that crypto companies are licensed banks in Hong Kong. However, the central bank highlighted that under the region's banking laws, only authorized institutions can conduct banking or deposit-taking business in Hong Kong.
The central bank warned the public that companies that describe themselves with words such as "crypto bank", "digital asset bank" and "crypto asset bank" or claim to offer banking services or bank accounts may be breaking the law.
According to the HKMA, except for authorized institutions, it is illegal for individuals or companies to use the word "bank" in their company name or descriptions. Additionally, facilitating the receipt of deposits without the proper license is also a violation of the law.
The HKMA reminded the public that non-bank crypto companies are not supervised by the central bank. This means that funds placed in so-called "cryptobanks" are not protected by the region's deposit protection scheme.
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Recently, Hong Kong has been cracking down on violators of its licensing laws. On September 15, the region's Securities and Futures Commission (SFC) issued a warning against crypto exchange JPEX for allegedly promoting its products and services in Hong Kong without obtaining a license or applying for one.
Following the SFC warning, the exchange's staff apparently disappeared from its Token 2049 booth in Singapore. It also increased its withdrawal fees up to 999 Tether (USDT), a measure that attempted to discourage users from recovering their funds from the exchange.
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