UK financial regulator warns about the cryptocurrency exchange FTX

Due to FTX’s unauthorised operation within the United Kingdom’s legal system, the Financial Conduct Authority (FCA) of the UK has issued a consumer warning.

Since August 2020, the FCA has been developing a list of businesses that deal in digital assets and have complied with the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations of 2017.

The FCA noted that FTX “is not authorised by us and is targeting people in the UK” and that “virtually all organisations and persons offering, marketing or selling financial services or products in the UK have to be authorised or registered by us.”

The 37 companies on that list as of right now include, among others, the cryptocurrency exchanges Gemini, Kraken, Galaxy Digital, and eToro, alongside challenger bank Revolut on a provisional registration status.

It’s unclear if Sam Bankman-FTX, Fried’s which has its headquarters in the Bahamas, will experience any immediate repercussions from the warning or if they’ll have the chance to negotiate their situation with the regulator.

The FCA claims that “firms that have not ceased trading are at risk of being subject to the FCA’s criminal and civil enforcement powers” in a blog post on the specifics of registration.

According to an FTX spokeswoman, Decrypt: “We’re investigating the situation and in contact with the appropriate authorities since we think someone is pretending to be FTX. The phone numbers supplied by the FCA are listed here as a cryptocurrency scam and are not from FTX.”

Since declaring that Binance’s cryptocurrency exchange is “not authorised to perform any regulated activity in the UK,” the FCA has a long history of being famously strict with regard to businesses that deal in digital assets. Two months later, the FCA provided an update on the matter and noted that, despite having “complied with all parts of the criteria,” Binance is “still unable to undertake regulated business within the UK.”

Consumers who deal with unregulated businesses are cautioned by the FCA that they “are unlikely to get your money back if things go wrong” since they “will not have access to the Financial Ombudsman Service or be covered by the Financial Services Compensation Scheme (FSCS).”

News Summary:

  • UK financial regulator warns about the cryptocurrency exchange FTX
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