The Hong Kong Monetary Authority (HKMA) has issued a warning to the public about crypto companies that portray themselves as banks without proper licensing. They emphasized that unlicensed “crypto banks” could mislead users. Furthermore, crypto users were informed that crypto businesses using banking terminology might violate the region’s banking laws.
Banking Activities Reserved for Licensed Entities
In a press release by the HKMA, it was stated that certain banking terms could be deceptive, leading users to incorrectly believe that crypto firms were official Hong Kong banks.
“Some crypto firms also use the term ‘deposits’ or promote ‘savings plans’ as ‘high-yield’ and ‘low-risk’ to describe the funds deposited by customers, potentially misleading the public into believing that these crypto firms are authorized banks in Hong Kong.”
HKMA
Additionally, the HKMA emphasized that the authority to conduct banking or deposit-taking activities in Hong Kong belongs exclusively to licensed entities.
The HKMA also reminded that non-bank crypto firms are not regulated by the central bank, indicating that funds deposited with so-called “crypto banks” are not protected by the region’s deposit protection scheme.
Source: Cointelegraph
