The Financial Conduct Authority (FCA), the regulatory body that oversees financial markets in the United Kingdom, drew attention. In particular, it made headlines on Sunday, October 8, by expanding the list of unauthorized cryptocurrency firms that consumers are advised to stay away from. The move comes as part of the FCA’s ongoing efforts to regulate the fast-growing crypto sector. Here are the details…
Cryptocurrency exchanges were included in the warning list
A total of 143 new organizations have been added to the FCA’s alert list, with some major players in the cryptocurrency exchange space finding themselves included. Notable names among these additions include HTX and KuCoin, owned by Huobi. The warning issued by the FCA only states “You should avoid doing business with this company” without going into further detail. Companies wishing to engage in “cryptoasset activities” in the UK must either be registered with the FCA or have provisional status to operate.
This regulatory requirement aims to ensure consumer protection and compliance with financial laws. As Jayson Probin, the FCA’s head of crypto financial promotions, warned in July, failure to comply with these regulations could lead to serious consequences, including potential criminal charges. Probin made the following statements:
We will take strong action against anyone making illegal promotions to UK consumers. This may include, but is not limited to, placing companies on our alert list, requesting and enforcing the removal of websites, social media accounts, applications, and any other infringing promotions.
FCA takes market-oriented measures
The FCA’s commitment to enforcing these regulations is clear from its actions over the past year. In August, the regulator announced that it had received 291 registration applications from crypto firms since 2020, but approved only 38 of them, accounting for around 13% of applicants. As of now, the FCA’s list of registered crypto asset providers includes 42 organizations, including popular names like Bitstamp, Revolut and Gemini.
The impact of the FCA’s tough stance on cryptocurrency regulations is being felt across the industry. PayPal recently suspended crypto transactions for its customers in the UK as it works to comply with the FCA’s requirements. Similarly, Dubai-based exchange Bybit ceased all its services in the UK at the end of September, citing “regulatory changes” as the reason for its withdrawal from the market. These developments underscore the increasing importance of regulatory compliance in the cryptocurrency sector as authorities such as the FCA seek to strike a balance between innovation and consumer protection in the evolving financial environment.
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