Hong Kong Monetary Authority Warning: Deposits in Unlicensed 'Crypto Banks' Not Protected by HKMA
September 18 TuoniaoX.com reports that the Hong Kong Monetary Authority has stated that funds deposited in 'crypto banks' are not protected by the region's deposit protection scheme. The Hong Kong Monetary Authority (HKMA) has issued a warning to users that cryptocurrency companies impersonating banks and using banking terminology may violate the region's banking regulations. The HKMA emphasized in a press release that the use of certain banking terms may mislead the public into believing that cryptocurrency companies are authorized banks in Hong Kong.
September 18 TuoniaoX.com reports that the Hong Kong Monetary Authority has stated that funds deposited in 'crypto banks' are not protected by the region's deposit protection scheme. The Hong Kong Monetary Authority (HKMA) has issued a warning to users that cryptocurrency companies impersonating banks and using banking terminology may violate the region's banking regulations. The HKMA emphasized in a press release that the use of certain banking terms may mislead the public into believing that cryptocurrency companies are authorized banks in Hong Kong.
However, the central bank clearly stated that under Hong Kong banking regulations, only licensed institutions are eligible to conduct banking or deposit-taking business in Hong Kong. According to HKMA regulations, it is illegal for any individual or company to use the word 'bank' in their company name or description without proper authorization. Additionally, facilitating deposit-taking without appropriate licensing is also illegal.
Meanwhile, the HKMA further reminded the public that non-bank cryptocurrency companies are not regulated by the central bank, meaning that funds deposited in so-called 'crypto banks' are not protected by the region's deposit protection scheme.