The Hong Kong Monetary Authority (HKMA) has issued a warning to users about crypto businesses that are posing as banks and using banking terminology. He is violating the banking laws of the area.The HKMA said some businesses are misleading the public by using banking terms, causing users to think crypto companies are authorized banks in Hong Kong. However the central bank has highlighted that only institutions licensed under the territory's banking laws are allowed to conduct banking or deposit-taking businesses in Hong Kong.
The Central Bank has warned the public that companies that call themselves crypto banks, digital asset banks and crypto asset banks or claim to offer banking services or banking accounts may be breaking the law. According to the HKMA it is illegal for businesses other than authorized institutions to use the word bank in the name or description of their companies. Apart from this, providing a deposit facility without proper license is also a violation of the law. The HKMA reminded the public that crypto firms that are not banks are not supervised by the central bank. This means that funds held in crypto banks are not protected by the region's deposit protection scheme.
Hong Kong has recently been cracking down on those violating its licensing laws. On September 15, the territory's Securities and Futures Commission (SFC) issued a warning against crypto exchange JPEX for promoting its products and services in Hong Kong without acquiring a license or applying for a license. Employees of exchange Token 2049 booth in Singapore have gone missing after the SFC issued a warning. Additionally, it has increased the withdrawal fees to 999 Tether to prevent users from withdrawing their funds from the exchange.
It is because of these security efforts and crypto readiness of Hong Kong that Hong Kong has been crowned the best prepared place for cryptocurrency adoption for the second consecutive time in 2023. Hong Kong has taken the top spot with a Crypto Readiness Score (CRS) of 8.36. Additionally, Hong Kong has the highest number of crypto ATMs per square foot due to its relatively small land area.
Read also : Investor Mark Cuban loses $870K in hot wallet hack
