Challenges Faced By Encryption Companies Opening Bank Accounts In Hong Kong

Key Points:

• After Hong Kong worked hard to reestablish itself as a cryptocurrency center, applications from encryption firms seeking to conduct business in Hong Kong increased, but these companies found it difficult to open bank accounts in Hong Kong. 
• Enterprises looking for licenses indicated that Hong Kong’s Securities and Futures Commission (SFC) has only eight officials handling roughly 80 applications, and even licensed enterprises have had problems obtaining bank accounts.

Opening bank accounts in Hong Kong remains tough for encryption enterprises, and licensed companies are no exception.

While the Hong Kong Monetary Authority (HKMA) has reminded banks that it does not prohibit banks from providing accounts to crypto companies, it also organized a roundtable meeting last month between banks and crypto companies, focusing on easing restrictions on licenses already held or in the process of being applied for. “It’s more like a wish list from regulators, and whether banks fully accept it is another matter,” one participant said. 

After policymakers relaxed their hostility to the sector, Hong Kong has become a place that encryption firms are exploring, even as other governments look more critically at crypto. Singapore’s financial authority has made it obvious to the market that it will be less supportive of anything it considers speculative, while the United States appears to be hostile to cryptocurrency.

According to an official at an encryption business with a Type 9 license in Hong Kong, encryption company is still unable to register bank accounts in Hong Kong and must rely on international banking partners because “we don’t know what additional information the bank needs, and the bank doesn’t seem to be sure what they want from us.”

Respondents stated that creating a bank account was a “sharp issue” at the moment, and that banks’ processes might be “sensitive and strict.” Even if the company is able to obtain the account, “the account will be closed for no reason after six months.” 

Even organizations that have successfully opened a bank account “have a lot of uncertainty about whether they can continue to have that account,” according to Kevin Kang, co-founder of corporate credit card issuer Reap, which means they are continuously looking for methods to open a bank account. Accounts now have more options and opportunities.

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