Hong Kong central bank warns against crypto firms using banking terms

The Hong Kong Financial Authority (HKMA) 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 mentioned that utilizing sure banking phrases could also be deceptive the general public, inflicting customers to suppose that the crypto companies are licensed banks in Hong Kong. Nonetheless, the central financial institution highlighted that beneath 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 providers or banking accounts could also be breaking the regulation. 

In response to the HKMA, apart from licensed establishments, it’s illegal for individuals or companies to make use of the phrase financial institution within the title or descriptions of their corporations. As well as, facilitating the taking of deposits with out the correct license can 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. Because of this funds positioned inside the so-called “crypto banks” aren’t protected by the area’s deposit safety scheme. 

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Hong Kong has just lately been cracking down on violators of its licensing legal guidelines. On Sept. 15, the area’s Securities and Futures Fee (SFC) issued a warning towards 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. 

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