Hong Kong Regulator Says Crypto Firms Claiming to Be Banks Are in Contravention of Banking Ordinance

The Hong Kong Monetary Authority said connected Sept. 10 that crypto firms presenting themselves arsenic banks are successful contravention of the region’s Banking Ordinance. The HKMA argued specified descriptions “may mislead members of the nationalist into believing that those crypto firms” are fiscal institutions that they tin trust.

False Descriptions Contravene Banking Ordinance

The Hong Kong Monetary Authority (HKMA) has told crypto firms to desist from the signifier of falsely describing themselves arsenic banks oregon characterizing their products arsenic “deposits.” According to the Hong Kong fiscal services regulator, crypto firms engaged successful this signifier are successful contravention of Hong Kong’s Banking Ordinance.

In a statement issued connected Sept. 15, the HKMA said it is alert that immoderate crypto businesses represent oregon picture themselves arsenic crypto plus banks and integer banks. The regulator besides warned crypto firms claiming to connection banking services oregon banking accounts. The HKMA argued specified descriptions “may mislead members of the nationalist into believing that those crypto firms” are fiscal institutions they tin trust.

HKMA Does Not Supervise Crypto Firms

The regulator stated that nary crypto steadfast should truthful usage words commonly associated with banks erstwhile attempting to woo clients. The HKMA said:

Under the Banking Ordinance, lone licensed banks, restricted licence banks and deposit-taking companies (collectively known arsenic ‘authorized institutions’), which person been granted a licence by the HKMA tin transportation retired banking oregon deposit-taking concern successful Hong Kong.

The regulator said unauthorized institutions utilizing the connection “bank” oregon those making “any practice that they are a slope oregon carrying connected banking concern successful Hong Kong” are committing an offense.

Meanwhile, the HKMA reminded Hong Kong residents that since it does not supervise crypto firms immoderate “funds placed with them are not protected by the Hong Kong Deposit Protection Scheme.” The regulator added that if residents are unsure of the presumption of a deposit-taking steadfast they should cheque “the registry of authorized institutions connected the HKMA’s website.”

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