Hong Kong reserve bank cautions versus crypto companies utilizing banking terms
The Hong Kong Monetary Authority (HKMA) has actually provided an alerting to users that crypto companies providing themselves as banks and utilizing banking terms might be breaching the area’s banking laws.
In a news release, the HKMA stated that utilizing specific banking terms might be misguiding the general public, triggering users to believe that the crypto companies are licensed banks in Hong Kong. Nevertheless, the reserve bank highlighted that under the area’s banking laws, just certified organizations are permitted to perform banking or deposit-taking companies in Hong Kong.
The reserve bank alerted the general public that companies explaining themselves with words like “crypto bank,” “digital possession bank,” and “crypto possession bank” or declares to be using banking services or banking accounts might be breaking the law.
According to the HKMA, aside from authorized organizations, it’s illegal for individuals or companies to utilize the word bank in the name or descriptions of their business. In addition, helping with the taking of deposits without the appropriate license is likewise an offense of the law.
The HKMA advised the general public that crypto companies, which are not banks, are not monitored by the reserve bank. This indicates that funds positioned within the so-called “crypto banks” are not safeguarded by the area’s deposit security plan.
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Hong Kong has actually just recently been punishing lawbreakers of its licensing laws. On Sept. 15, the area’s Securities and Futures Commission (SFC) provided a caution versus crypto exchange JPEX for supposedly promoting its services and products in Hong Kong without protecting a license or making an application for one.
Following the SFC’s caution, the exchange’s personnel apparently vanished from its Token 2049 cubicle in Singapore. It likewise increase its withdrawal costs to approximately 999 Tether (USDT), a relocation that attempted to dissuade users from obtaining their funds from the exchange.
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