The United Kingdom financial industry watchdog, Financial Conduct Authority (FCA), alleged FTX crypto exchange of “providing financial services or products in the UK” without authorization, listing it as an “unauthorized firm”.
The FCA is coming down heavily on unregistered cryptocurrency-related businesses in the UK. In 2021, it issued a consumer warning against crypto exchange, Binance Markets Limited, part of the Binance group, banning the crypto platform from undertaking any regulated activity in the UK. The financial regulator has also warned several operators of crypto ATMs in the UK to shut down their machines.
A Word of Caution for Crypto Users
According to an official press release, the U.K. Financial Conduct Authority published a warning on its website regarding Bahama-based cryptocurrency exchange FTX. The regulator noted that the crypto firm may be providing financial services or products in the UK without the required authorization. FCA also warned that individuals won’t be able to get their money back or seek the protection of the Financial Services Compensation Scheme (FSCS) “if things go wrong.”
The FCA further explained that although FTX does not carry the necessary authorization, the crypto firm has been wooing investors in the United Kingdom and carrying out specific crypto asset activities. In addition, the regulatory watchdog cautioned British citizens and investors to be wary of dealing with unauthorized firms as there are significant risks about financial crime and money laundering.
UK’s Increasing Crypto-Related Activities
Financial regulators around the world are seeking to introduce stringent regulations regarding digital assets. The UK has accelerated its efforts to regulate the crypto industry in the face of the rising adoption. In July 2022, the UK Financial Services and Markets Bill was rolled out that included provisionscrypto assets for the regulation of crypto assets and stablecoins for the first time. Meanwhile, a UK Treasury spokesperson expressed,
“The Financial Services and Markets Bill published today sets up the framework for regulating stablecoins in the UK and we will be consulting on a world-leading regime for the rest of the crypto market later this year.”
We're working to make the UK a global cryptoassets hub. We want to see the businesses of tomorrow, and the jobs they create, here in the UK.
— Rishi Sunak (@RishiSunak) April 4, 2022
Last month, Singapore-based cryptocurrency platform, Crypto.com, became the latest company to join the list of crypto firms registered with the FCA. Earlier this year, former Chancellor of the Exchequer, Rishi Sunak, had reiterated his ambition to make the UK, a global hub for crypto asset technology. In a statement, he specified,
“If crypto-technologies are going to be a big part of the future, then we, the UK, want to be in, and in on the ground floor.”