The region’s deposit protection plan does not apply to deposits made at “crypto banks” that are not authorized, according to the HKMA.

The Hong Kong Monetary Authority warned cryptocurrency businesses posing as banks may violate local regulations by using bank-related terms.

The HKMA stated that certain banking terms might mislead the public into believing cryptocurrency businesses are legitimate Hong Kong banks. The central bank stressed that only authorized institutions may offer banking or deposit-taking services under Hong Kong’s banking laws.

The central bank warned the public that firms describing themselves with words like “crypto bank,” “digital asset bank,” and “crypto asset bank” or claiming to be offering banking services or banking accounts may be breaking the law.

The HKMA states it’s illegal for non-authorized entities to include “bank” in their company names or descriptions. In addition, facilitating the taking of deposits without the proper license is also a violation of the law.

The HKMA reminded the public that the central bank does not oversee cryptocurrency companies that are not banks. This indicates that the so-called “crypto banks” deposits are not covered by the region’s deposit protection program.

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