The increasing scrutiny on cryptocurrency exchanges is becoming a focal point for regulatory bodies worldwide. Recently, the Financial Conduct Authority (FCA) of the United Kingdom has intensified its crackdown on HTX, a prominent crypto exchange. The FCA’s actions come in response to claims regarding the platform’s unlawful marketing of crypto services aimed at UK consumers.
Proposed Restrictions on HTX in the UK
In an official announcement released earlier this week, the FCA indicated its decision to reach out to leading social media networks and app store providers. The goal is to restrict access to HTX within UK borders.
This move entails the removal of HTX’s applications from both Google Play Store and Apple App Store for UK users, as well as the suspension of the exchange’s social media accounts catering to British audiences.
According to the FCA, HTX has continuously promoted “unauthorized crypto services” on various well-known social media platforms, including TikTok, X (formerly Twitter), Facebook, Instagram, and YouTube. These activities allegedly violate UK regulations that dictate how financial products can be advertised to the public.
The regulatory body has expressed concerns about HTX’s “non-transparent corporate structure,” which it claims obscures the identities of the exchange’s owners and executives. Moreover, multiple outreach attempts by the FCA to engage with HTX have reportedly gone unanswered.
While HTX has initiated some compliance steps, such as prohibiting new UK user registrations, the FCA deems these efforts insufficient. The regulator remains unconvinced that these limitations on new account creation will be enduring.
The FCA Takes a Strong Stance
Steve Smart, the joint executive director of enforcement and market oversight at the FCA, emphasized that the organization aims to foster a stable and competitive environment for cryptocurrency. This is essential to ensure consumers are empowered to make informed financial decisions.
He pointed out that HTX’s actions starkly contrast with firms striving to adhere to the UK’s regulatory standards. This enforcement action marks a significant moment, as it is the first instance where the FCA has targeted a crypto business for illegally advertising financial products to UK residents.
HTX has found its name on the FCA’s Warning List, which signals to consumers that engaging with the platform may result in a lack of protections often associated with authorized services, such as access to the Financial Ombudsman Service.
In light of the situation, Nick Barnard, a partner at Corker Binning, remarked that the complexities of regulating the crypto sector from one jurisdiction present unique challenges. He acknowledged that the FCA’s authority is limited when it comes to companies lacking a physical presence in the UK. Yet, he believes it is crucial for the regulator to adopt a firm stance against businesses disregarding established UK regulations.
Featured image from OpenArt, chart from TradingView.com
