Hong Kong regulator warns crypto companies not to claim to be “banks”

Aiming to protect customers against possible deception, the Hong Kong Monetary Authority (HKMA) recently warned crypto companies to avoid using the term “bank” unless they are an authorized institution.

“The Hong Kong Monetary Authority (HKMA) wishes to remind the public to be wary of companies involved in crypto businesses that present themselves as “banks” or describe their products as “deposits.” The HKMA warns these companies that describing themselves and their products in this way may be a violation of the Banking Ordinance,” it wrote in a statement.

According to the regulator, the HKMA is already aware that some companies in the sector describe themselves using terms such as “crypto bank”, “crypto asset bank”, “digital asset bank”, “digital bank” or “commercial bank”. digital”, or claiming to offer “banking services” or “bank accounts”.

“Some crypto companies also use the word “deposits” to describe funds placed with them by customers or to promote “savings plans” as “low risk” with “high return.” These descriptions may mislead the public into believing that these crypto companies are authorized banks in Hong Kong, which they can trust with their savings,” he warned.

It is worth remembering that the Securities and Futures Commission (SFC), Hong Kong’s regulator, issued a warning on August 7 regarding the detection of some unlicensed exchanges in the city that are involved in “improper practices”. According to the entity’s statement, unlicensed activities are a “criminal offense”.

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