The Hong Kong Monetary Authority has issued cautions to the public against cryptocurrency businesses that falsely represent themselves as banks and offer their products as deposits.
Companies in the cryptocurrency industry who call themselves banks and market their services as “deposits” have been issued an urgent warning by the Hong Kong Monetary Authority (HKMA). A further recommendation from the banking regulator was that people use extreme caution when dealing with such businesses.
In light of the authority’s recent findings, the Hong Kong Monetary Authority (HKMA) brought these claims of “crypto bank,” “digital asset bank,” “crypto asset bank,” “digital bank,” and “digital trading bank” to public notice. Authorities in Hong Kong have said that these sites break the law by leading people to believe that they are dealing with legitimate financial institutions that can hold their money safely.
According to the announcement, only institutions with a valid license from the HKMA will be allowed to provide banking services in Hong Kong. The authorities warned that any unlicensed business dealings are prohibited and subject to punishment by referencing,
“Other than authorized institutions, it is illegal for anyone to use the word “bank” in their business name or description, or to imply that they are a bank or doing banking business in Hong Kong (Note 1). It is also illegal for anyone to run a business that takes deposits in Hong Kong (Note 2) or ask the public to make deposits (Note 3).”
The Securities and Futures Commission (SFC) had previously issued a warning on the cryptocurrency exchange JPEX, stating that the company was operating illegally. The agency also offered explanations for the platform’s many questionable actions, such as presenting itself as a legitimate business when it is not.
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