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Hong Kong central bank warns against crypto firms using banking terms

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The Hong Kong Financial Authority (HKMA), the particular administrative area’s central financial institution, has issued a warning to customers that crypto companies presenting themselves as banks and utilizing banking terminology may very well be violating the area’s banking legal guidelines. 

In a press launch, the HKMA said that the usage of sure banking phrases could also be deceptive the general public, inflicting customers to suppose that the crypto companies are approved banks in Hong Kong. Nonetheless, the central financial institution highlighted that underneath the area’s banking legal guidelines, solely licensed establishments are allowed to hold out banking or deposit-taking companies in Hong Kong. 

The central financial institution warned the general public that companies describing themselves with phrases like “crypto financial institution,” “digital asset financial institution,” and “crypto asset financial institution” or claims to offer banking companies or banking accounts could also be breaking the regulation. 

In accordance with the HKMA, aside from approved establishments, it is illegal for individuals or companies to make use of the phrase “financial institution” within the identify or descriptions of their corporations. As well as, facilitating the taking of deposits with out the right license can also be a violation of the regulation. 

The HKMA reminded the general public that crypto companies which aren’t banks aren’t supervised by the central financial institution. Which means that funds positioned throughout the so-called “crypto banks” aren’t protected by the area’s deposit safety scheme. 

Associated: Hong Kong’s crypto stance: Execs weigh in on Web3 in the region

Hong Kong has not too long ago been cracking down on violators of its licensing legal guidelines. On Sept. 15, the area’s Securities and Futures Fee (SFC) issued a warning in opposition to crypto trade JPEX for allegedly selling its services and products in Hong Kong with out securing a license or making use of for one.

Following the SFC’s warning, the trade’s workers seemingly disappeared from its Token 2049 sales space in Singapore. It additionally ramped up its withdrawal charges to as much as 999 Tether (USDT), a transfer that attempted to discourage customers from retrieving their funds from the trade. 

Journal: China’s blockchain satellite in space, Hong Kong’s McNuggets Metaverse: Asia Express