The United Kingdom’s Financial Conduct Authority (FCA) has made significant additions to its list of non-authorized firms, warning consumers against engaging with them. On Sunday, October 8, the FCA updated its warning list, which now includes a total of 143 entities, including major cryptocurrency exchanges like HTX (owned by Huobi) and KuCoin. These developments underscore the regulatory scrutiny surrounding the cryptocurrency industry in the UK.
Crypto exchanges under scrutiny
In a move to protect consumers and ensure compliance with existing regulations, the FCA has expanded its list of entities that customers should avoid dealing with. The warning list provides limited information, with a succinct message: “You should avoid dealing with this firm.” This action is in line with the UK’s stance on crypto asset activities, which necessitates that firms operating in this space must either be registered with the FCA or hold temporary status to operate legally.
The FCA has been uncompromising in its stance against entities operating without proper authorization. Jayson Probin, the crypto financial promotions lead at the FCA, previously emphasized the consequences of non-compliance, including potential criminal charges. The regulatory body has stated that it will take robust action against those illegally promoting financial products to UK consumers. This includes placing offending firms on its warning list, requesting the removal of websites, social media accounts, apps, and other promotional materials that breach regulations. Additionally, enforcement action may be taken to ensure compliance with the law.
FCA limited approvals amidst stringent requirements
The FCA’s actions are indicative of the stringent requirements placed on cryptocurrency firms seeking to operate in the UK. In August, the FCA disclosed that it had received a total of 291 applications for registration but had approved only 38, constituting roughly 13% of the applications. This strict approval process underscores the importance of adhering to regulatory guidelines for businesses operating in the cryptocurrency space.
As of now, the FCA’s list of registered crypto asset providers includes 42 entities, with notable names like Bitstamp, Revolut, and Gemini holding authorized status. This small number underscores the selectivity and thorough evaluation that the FCA employs when considering applications from cryptocurrency-related businesses.
The regulatory environment in the UK has prompted several notable cryptocurrency entities to take actions to comply with the FCA’s requirements. PayPal recently suspended crypto transactions for its UK customers as it works to ensure full compliance with the regulatory framework. This move by PayPal reflects the challenges that financial institutions and technology companies face in navigating the complex regulatory landscape surrounding cryptocurrencies.
Another significant development was the decision by Dubai-headquartered cryptocurrency exchange Bybit to suspend all its services in the UK in late September. This suspension was attributed to “regulatory changes” in the UK, further emphasizing the evolving nature of the cryptocurrency industry and the necessity for companies to adapt to changing regulatory requirements.
