According to Foresight News, the Hong Kong Monetary Authority (HKMA) has issued a statement warning against virtual asset institutions that claim to be 'crypto banks', 'virtual asset banks', 'digital asset banks', 'digital banks', or 'digital trading banks', or claim to provide 'banking services' or 'bank accounts'. Some virtual asset institutions also use the term 'deposit' to describe funds held by clients at these institutions or promote 'savings plans' as 'low risk' and 'high return', which may be misleading.
Under the Banking Ordinance, only licensed banks, restricted license banks, and deposit-taking companies (collectively referred to as 'authorized institutions') granted a license by the HKMA can operate banking or deposit-taking businesses in Hong Kong. Apart from authorized institutions, anyone using the term 'bank' in their name or title while operating a business in Hong Kong, or claiming to be a bank or operating a banking business in Hong Kong, is committing a crime. Anyone operating a deposit-taking business in Hong Kong or inviting the public to make deposits is also committing a crime. The HKMA reminds that virtual asset institutions that are not Hong Kong banks are not regulated by the HKMA, and funds held at these institutions or platforms are not protected by the Hong Kong Deposit Protection Scheme.
