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Hong Kong regulator warns against crypto companies misusing the term ‘banks’

on Sep 15, 2023
  • HKM has warned against crypto firms using the term bank when describing their services.
  • Only HKMA-certified banks, deposit-taking firms, and restricted license banks can operate in Hong Kong.
  • Hong Kong remains the most crypto-ready destination globally.

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On Friday (15 September), the Hong Kong Monetary Authority (HKMA) warned against cryptocurrency companies misusing the word bank when describing their services. The regulator highlighted that these firms mislead users who think these companies are HKMA-certified. The watchdog clarified,

“Only licensed banks, restricted license banks, and deposit-taking companies (authorized institutions), which have been granted a license by the HKMA can carry out banking or deposit-taking business in Hong Kong.”

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Further, crypto businesses should avoid the term deposits when describing money that users place with them. Using terms such as banking accounts is inaccurate since cryptocurrency firms cannot be akin to banks.

HKMA’s warning comes after Hong Kong’s Securities & Futures Commission called out JPEX, a virtual asset trading platform (VATP), for activities such as crypto savings, earnings, or deposits – against SFC’s regulatory framework for VATPs.

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Moreover, JPEX has advertised itself as an authorized firm while it is yet to secure a VATP license. JPEX actively promoted its offerings to Hong Kong residents through opinion leaders and social media influencers.

“The SFC wished to make it clear that no entity in the JPEX group is licensed by SFC.”

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Hong Kong remains the most crypto-ready destination globally

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Hong Kong continues to cement its presence as an international cryptocurrency hub. As invezz.com reported, it permitted retailers to invest in virtual currencies in May.

The latest rankings show Hong Kong topped the chart as the most crypto-ready hub for the second successive year. The hierarchy considers factors such as an equitable taxation framework, accessibility to crypto ATMs, a vibrant startup culture, and a decisive regulatory regime.

Switzerland emerged second as the United States dropped one spot to third. Slovenia, Australia, and Canada joined the top ten list, signaling increased global cryptocurrency acceptance.

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