Unlicensed Virtual Asset Institutions Use the Term "Bank" in Hong Kong Are Suspected of Committing Crimes

[ChainDD report] September 15 (ChainDD) The Hong Kong Monetary Authority (HKMA) has noted that some virtual asset institutions call themselves "crypto banks", "virtual asset banks", "digital asset banks", "digital banks" or "digital transaction banks", or claim to provide "banking services" or "bank accounts".

Some virtual asset institutions also use the term "deposits" to describe funds deposited with them by their clients, or advertise "savings plans" as "low risk" and "high return", which may be misleading.

Under the Banking Ordinance, only licensed banks, restricted licensed banks and deposit-taking companies (collectively referred to as "authorized institutions") licensed by the HKMA may carry on banking or take deposits in Hong Kong.

The HKMA has advised that any person, other than an authorized institution, who carries on business in Hong Kong using the name or title of "bank" or representing that the person is a bank or is carrying on banking business in Hong Kong commits an offence; A person shall not carry on a deposit-taking business in Hong Kong or invite members of the public to make any deposits, otherwise he will also be guilty of an offence.

The HKMA reminds people that virtual asset institutions of non-Hong Kong banks are not regulated by the HKMA, and funds deposited with such institutions or platforms are not covered by the Hong Kong Deposit Protection Scheme.