The Hong Kong Monetary Authority (HKMA) has issued a warning to cryptocurrency firms against using banking terminology in their marketing. The HKMA has identified that some crypto firms are using phrases such as “banking accounts,” “digital trading bank,” “crypto bank,” and “savings plans,” which are synonymous with banks and imply a level of security that crypto firms cannot provide. Using such terminology is a violation of the Banking Ordinance in Hong Kong, as only licensed banks, restricted licence banks, and deposit-taking companies are allowed to carry out banking or deposit-taking business in the country.
The HKMA references sections 11, 12, 92, and 97 of the Banking Ordinance to reinforce that businesses without a license cannot take or encourage deposits from consumers. It’s important to note that consumers who deposit funds in entities described as “crypto banks” are not covered by the Hong Kong Deposit Protection Scheme.
The use of banking terminology by some crypto firms has been an attempt to gain consumer trust in a volatile and often risky industry. However, the misrepresentation of their services through such terminology may lead to further trust issues and regulatory scrutiny.
By FCCT Editorial Team
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