UK Regulators Brand FTX as “Unauthorized”
- Crypto exchange FTX has been branded as unauthorized in the United Kingdom.
- While FTX is set to miss out on the UK market, the company has expanded to other countries.
British regulators have declared the services of crypto exchange FTX within its shores to be unauthorized. The Financial Conduct Authority (FCA), the UK’s chief financial regulator, reportedly added FTX to the list of unregistered firms operating in the country.
The FCA warned the public about the dangers of transacting with the exchange, which included the likelihood of not getting their money back if things went south. According to the financial regulator, the Bahamas-based firm “may be providing financial services or products in the U.K. without authorization.”
A warning by the FCA read,
This firm is not authorized by us and is targeting people in the UK. You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong.
Crypto firms have made more efforts to register with the FCA since the year began. As of last month, about 37 firms had reportedly completed registration procedures and achieved Money Laundering Regulations approval. Some of these firms include Crypto.com, eToro UK, Rubicon Digital UK, DRW Global Markets LTD, Zodia Markets (UK) Limited, and Uphold Europe Limited.
The FCA is known to take strict measures when it comes to enforcement. However, there are no clear consequences for unregistered firms. Following the passage of crypto-focused regulations in 2020, the UK watchdog was given full authority to oversee the crypto industry. The FCA has legal backing to enforce anti-money laundering and counter-terrorist financing regulations.
In an interview with Cointelegraph, a spokesperson for the FCA said,
Successful registration depends upon a firm meeting the minimum standards we expect to prevent money laundering and terrorist financing, and we have seen too many financial crime red flags missed by the crypto asset businesses seeking registration.
The crypto industry has grabbed center stage in the United Kingdom. Notably, the present administration plans to make digital assets a big part of its agenda. However, the FCA’s firm stance on crypto regulation has been seen as a major stumbling block.
How Has FTX Fared in 2022?
On its part, FTX has been making headlines for different reasons. The crypto exchange was previously rumored to be in the race to acquire its competitors, Huobi and Skybridge. However, the company’s representatives dismissed claims of acquiring Huobi.
FTX has also found itself locking horns with UK regulators. The Sam Bankman-Fried-led exchange recently found itself in the wrong book of the Federal Deposit Insurance Corporation [FDIC]. The FDIC reportedly issued a cease and desist note to FTX for allegedly misleading the public with false information.
FTX might lose its grip on the UK market following this warning. However, the exchange has done well in expanding its frontiers to other parts of Europe. Like Binance, FTX is increasing its presence in emerging markets and recently secured permission from the Cyprus Securities and Exchange Commission [CySEC] to conduct business in the area. FTX has also attempted to move into Asia in recent months.