The Hong Kong Monetary Authority (HKMA) has warned crypto firms not to use the term “bank” or describe themselves as “deposit-taking businesses” as it contravenes the Banking Ordinance.
HKMA noted that only authorised institutions, such as licensed banks, restricted licence banks and deposit-taking companies, can carry out banking or deposit-taking business in Hong Kong. Using terms such as digital bank, crypto bank, crypto asset bank, digital trading bank and digital asset bank is also not allowed.
The regulator also cautioned crypto firms not to claim to offer banking accounts or banking services, and to refrain from using terms such as “savings plans”, “low risk” and “high return”. It warned that such terms may mislead members of the public into believing that crypto firms are authorised banks in Hong Kong, to which they can entrust their savings.
HKMA reminded the public that funds sent to accounts with unauthorised crypto firms do not benefit from the Hong Kong Deposit Protection Scheme.
Despite the warning, Hong Kong is one of the fastest-growing crypto hubs in the world and many crypto companies, including exchanges, have looked to secure regulatory approval to offer products and services there. The Hong Kong government recently unveiled a crypto framework to transform the crypto sector.
The Securities and Futures Commission (SFC) of Hong Kong has also warned exchanges and other providers against misrepresenting their regulatory status, and against offering services and products to investors before completing the process, or extending services not allowed under the law.